Role of Member States in the Development of Statistics in the Global Crisis

1. Role of Member States in the Development of Statistics in the Global Crisis Charles Enoch Deputy Director Statistics Department, IMF

2. The views expressed in this presentation are those of the author and should not be seen as those of the IMF or its Executive Board

3. The Global Financial Crisis • First phase in 2007 with Northern Rock and Bear Sterns. • Crisis became globally systemic in 2008, requiring massive government support to ailing institutions plus unorthodox monetary policies. • Recovery likely to take many years, will need highly skilled economic management.

4. Statistics in the Global Crisis • As in previous financial crises, lack of attention to) statistics seen as contributory factor in crisis, and in particular in the intensity of the crisis. • G-20 plenary in London in November 2008 commissioned work to identify “data gaps” that have been revealed through the crisis.

5. Statistics in the Past Crises • Mexican crisis of 1994 found data gaps partly responsible, largely on the macro side. • Further focus after Asian crises of late-1990s. • Attention to transparency, and adoption of 12 best-practice standards and codes • Led to range of initiatives: SDDS, GDDS, Data ROSCs, FSIs.

6. The Initiatives in the Present Crisis • Present crisis: macro data seem reliable; management of crisis would have been far more difficult if there had been the same uncertainty about macro situation as ten years ago. • Issues now to broaden (geographic) coverage of initiatives and extend them to financial data.

7. The Data Gaps • Off-balance-sheet activities (SPVs). • Complex products. • Nontransparent accounting • Unregulated institutions (including nonbank financial institutions). In part being addressed by regulators, in part by market forces, and in part falls to statistics.

8. This Crisis is Different... • Because it manifests itself at the “center” not in the “peripheral” countries. • Reforms may be more thoroughgoing, since they have attention at the highest levels in the “center” countries (but may not...) • Intense activity in the “centers” may mean fewer expert resources available for the “periphery:” peripheral” countries more on their own.

9. The Member States, the Data Initiatives, and the Crisis • On the statistics side, renewed emphasis on transparency, international standards, and focus on financial best practices: increased selectivity likely in line with countries’ involvement/adherence to these initiatives/standards. • Member countries may consider their involvement, and whether to enhance them.

10. Member Countries: GDDS (1) • Prices—consumer price index provides development framework for statistics, production of “metadata” describing statistical practices and encouraging development plans. • Very successful in encouraging improvements in macroeconomic and sociodemographic statistics. • November 2008 decision for “GDDS plus” including some data dissemination.

11. Member Countries: GDDS (2) • 96 GDDS participants, across all regions. • Most Caricom members participate, also ECCB as regional member. • Target of complete Caricom participation (Guyana).

12. Member Countries: SDDS (1) • SDDS intended for all countries that have, or wish to have, access to international capital markets. • Subscription voluntary, but subscribers are mandated to fulfill certain obligations (coverage, timeliness, periodicity of data dissemination, ARC, metadata). • IMF standard setter, assessor, TA provider.

13. Member Countries: SDDS (2) • 64 subscribers, in nearly all regions. • Research studies show borrowing cheaper for SDDS subscribers. • Other broader benefits (consideration as “good housekeeping” certificate, for instance for Fund programs. • Extensive TA assistance for would-be subscribers. • No Caricom members yet: Jamaica, Trinidad and Tobago, and others could consider.

14. Member Countries: Data ROSC (1) • All 12 standards and codes subject to assessment: Reports on Observance of Standards and Codes (ROSC). • Assessment of SDDS/GDDS the “Data ROSC.” • Uses Data Quality Assessment Framework (DQAF). • Assessments voluntary; publication voluntary. Great majority published.

15. Member Countries: Data ROSC (2) • 120 Data ROSCs undertaken, for 90 countries. Several updates, as countries used findings as basis for statistical improvements. • Data ROSC for ECCB, but not for any Caricom member. • Resource pressures leading to introduction of near-ROSC, or statistical diagnostic, as for Aruba. • Caricom members may wish to request Data ROSC in light of enhanced focus on statistics in the present financial crisis (Jamaica, Trinidad and Tobago—both have done FSAPs).

16. Member Countries: FSIs (1) • IMF Board approved development and dissemination of FSIs in 2001, after analytical work in light of 1990s’ crises. • 12 core indicators, 28 encouraged: priority to work on the encouraged in the initial phase. • Coordinated compilation exercise, involving 62 countries (essentially the SDDS subscribers), and subsequent commitment to disseminate as from end-2008. • IMF Board approved in November 2008 a work program to include selected FSIs into SDDS as encouraged categories after transition period.

17. Member Countries: FSIs (2) • IMF FSI datapage goes live July 31, 2009. • Data will be available for 40+ countries, also detailed metadata for 20+ countries; will be completed for remainder over coming months. • Almost all provide core indicators, less complete coverage of encouraged categories. • Next stages: broaden indicators including beyond banking sector, increase country coverage (by 10 per year), increase frequency (quarterly), enhance analytics.

18. Member Countries: FSIs (3) • No CARICOM country in IMF FSI dissemination exercise. • Would be welcome in the future. • Assistance has been given on the nature of the FSIs and how to self-compile. • Can gain from examining data on the “center” countries that are appearing on the website. • Can also gain from the detailed metadata: gives vast scope for analysis, e.g., on countries’ accounting practices and practices on nonperforming loans.

19. Conclusions • Present financial crisis leads to renewed focus on data—including the international initiatives and data gaps. • Limited involvement so far by member states in the international initiatives (mainly GDDS), but added reasons now to become more fully involved, both in the existing initiatives (SDDS) and the new ones (FSIs).

20. Thank You