Financial%20Databases%20

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Financial Databases OECD and IMF

Presentation to the OECD Working Party on
Financial Statistics Patrick OHagan October
2nd, 2007
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Financial databases

• Demand for financial information is expanding, in
  line with increasingly complex and inter-related
  economies Policy-making, financial soundness
  assessments, macro-economic analysis, financial
  market/sector analysis, as well as economic
  research
• National statistical organizations and
  international bodies have responded, and continue
  to respond, to these needs
• International organizations have constructed
  (from member countries data) more than one type
  of DB for specific uses but these DB are
  closely related in some respects
• As IFDB expand, it may be useful to also plan for
  increased harmonization among them. This raises
  the question of whether there would be benefits
  of increased co-ordination and harmonization

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Snapshot of select related international
financial databases
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Select OECD Financial databases

• OECD has a long-standing history in collecting
  and releasing financial statistics The
  financial account and the balance sheet account
  are SNA93-based and have always covered all
  sectors and an aggregate level of detail for most
  financial instruments some pilot projects to
  expand the level of instrument detail
• Since mid-1990s and in recognition of the
  increasingly important role of institutional
  investors, the OECD also has been compiling and
  releasing balance sheet data and related
  indicators on these institutions
• OECD also has a long history of compiling data on
  bank income statements and balance sheets,
  including a series of associated financial
  indicators
• Among other current indicators, government sector
  financial data are also published in OECD
  Economic Outlook major indicator is government
  debt-to-GDP

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Select IMF Financial databases

• IMF has recently re-vamped its monetary
  statistics program in conjunction with the new
  Monetary and Financial Statistics Manual (MFSM).
  The institutional sector and financial instrument
  details follow SNA93 (harmonized with SNA93) but,
  in some instances, request more depth (two-whom
  from whom) or modified concepts (w/r to
  consolidation)
• IMF has recently added Financial Soundness
  Indicators (FSI). FSI cover sector data as well
  as related financial market indicators. FSI
  focus mainly on deposit-taking and lending
  institutions (the core set). Details on an
  aggregate for financial corporations,
  non-financial corporations and households are
  also requested (encouraged set)
• IMF also publishes a limited amount of SNA-based
  government indicators, including Debt-to-GDP in
  the IMF World Economic Outlook.

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Links between IFDB

• Linked to each other - partly in structure and
  concepts, partly in uses. However, they are all
  closely related in one key regard All are
  fundamentally drawn from the same source data in
  each of the countries
• For corporations - the broad sector common to
  OECD financial statistics and to IMF MFS and FSI
  - the source is survey and administrative data
  compiled by the statistical agencies (which could
  be central banks) in the respective countries and
  organized by industry and by institutional
  sectors in the national accounts
• Common starting point with respect to country
  source data can allow for improved harmonization
  of the information in international financial
  databases as a means to reduce country response
  burden and, more importantly, it better serve
  the needs of users

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Country response burden

• The financial accounts at the OECD are closely
  related to the IMF MFS and, the OECD Bank
  Profitability data (and proposed changes) tie in
  to the detail in the IMF FSI initiative.
  Increased harmonization has the potential to
  allow for dual data submissions from member
  countries
• E.G Many countries produce financial instrument
  breakdowns in greater detail than required by
  OECD SNA93 based financial accounts, including a
  degree of counterpart information. This
  additional instrument detail is required by the
  IMF MFS for financial institutions
• Envisage joint submissions of detailed financial
  statistics where the OECD would select all
  sectors and aggregate instrument details and the
  IMF would select specific sectors and
  sub-instrument details

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User needs and issues

• Countries financial databases have evolved based
  on policy-analytic needs some harmonization of
  these databases in recent years with the
  concerted move towards international standards
  which has, in turn, benefited the OECD and IMF
  efforts.
• International agencies compile data for their own
  internal analysis with the major relevance
  concern likely the countries ability to comply
  with the requirements of the databases where,
  comparability across countries data is a
  paramount concern.
• International agencies also release publicly
  their financial databases with a significant
  number of external users of these data,
  including, financial-credit analysts,
  international macro-economists, governmental
  bodies, forecasters, etc.

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External user needs and issues

• External users have simultaneous access to all of
  these financial databases, and the relevance
  issues may not be quite so straightforward for
  them
• With access to more financial databases than
  before comparability across countries data may
  take on a different dimension - comparability and
  harmonization across databases
• For example, there may be an analyst assessing
  the economies of a select group of countries and
  using OECD national and financial accounts
  databases in the process. In addition, this same
  individual may whish to do conduct this analysis
  in the context of financial fragilities and may
  want to make reference to the IMF FSI for these
  same countries. In this case, it is desirable to
  have similar concepts and data and supporting
  information (to the extent possible)

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IFDB supporting information

• Sources and methods or metadata documentation may
  help outside users but likely do not go far
  enough in linking the information in the IFDB
• In many (or most) countries financial databases,
  metadata exists supplemented by sources and
  methods documents of varying degrees of detail.
  Despite the fact that both the OECD and IMF have
  made very good progress in this area,
  methodological notes and metadata exist in
  different degrees across the international
  financial databases
• For users, it would be useful to be able to link
  this information across financial databases. At a
  very minimum each set of sources and methods or
  metadata could cross-reference each other,
  highlighting the close relationships among the
  IFDB

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Issues in Canadian context

• A key external user recently called Statistics
  Canada regarding different estimates for
  government net debt to GDP for Canada. Data
  pulled from the IMF website did not reconcile
  with either OECD data or published Canadian data.
  This is a key point That user issues raised
  with seemingly inconsistent data often come back
  to the national statistical agency for
  clarification
• In Canada, the national accounts staff submit the
  OECD financial statistics, while the Bank of
  Canada submits the to MFS and the FSI. For MFS
  Bank uses (i) data compiled for banking at the
  central bank as well as (ii) data for other
  industries (survey data), sectors (national
  accounts data) compiled at the STC. As a result,
  datasets will likely be different with respect to
  timing, detail and concepts between the OECD
  financial databases and the IMF MFS for Canada
  clearly not a desirable situation from a user
  perspective

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Summary

• This presentation (i) recognizes that each
  international financial database has specific
  needs and (ii) supports strongly the continued
  development of these databases
• The ongoing co-coordinated revision process to
  international standards has and will continue to
  assist greatly in harmonizing data and supporting
  information. A general move towards adoption of
  international standards by member countries has
  also gone a long way to improve international
  comparability
• This presentation argues that more harmonization
  is likely possible and beneficial and
  speculates on the potential for some degree of
  strategic streamlining between the two key
  agencies to reduce data collection burden and
  mainly to improve data for external users
• In many countries the members of the WPFS respond
  to both OECD and IMF requests for financial data
  Further, the WPFS is a group that has the
  collective expertise to understand and/or meet
  the demands of these varied international
  financial databases. WPFS is well-positioned to
  offer up some debate with respect to improving
  the harmonization across these databases

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Comments?

• Message in this presentation reinforces the
  similarities of IFDB which have the potential
  to develop into an analytically powerful related
  set of financial databases
• Presentation deliberately stops short of making
  direct recommendations but it asks whether or
  not there is a consensus that improved
  harmonization could and should be pursued and,
  if so, how, where and over what time frame
• Implicitly suggested is admittedly somewhat
  ambitious and can be seen as objectives for the
  longer term, but this does not preclude the
  consideration of some short and medium-term
  suggested initiatives
• E.G That the two agencies consider the
  practicalities increased harmonization and of
  future co-operation on international financial
  databases, perhaps selecting one set of related
  databases as a test exercise over a specific time
  frame