Data Sources

This section is divided into three main sources of financial markets data – international financial institutions (IFIs), joint IFI releases and commercial or private sector sources. Limitations of the data produced by individual countries are covered in the next chapter.

2.3.1 International Financial Institutions

International Monetary Fund (IMF)

A major source of information about available financial market data is the country pages on the IMF’s Dissemination Standards Bulletin Board (DSBB)³⁷. The DSBB is an integral part of the development of international data dissemination standards - the

37 See website http://dsbb.imf.org

IMF Special Data Dissemination Standard (SDDS) and the General Data Dissemination System (GDDS).

The SDDS and GDDS have different objectives. The objective of the SDDS is to guide member countries that have, or that might seek, access to international capital markets in the provision to the public of comprehensive, timely, accessible and reliable economic and financial statistics, using specified data categories and requirements for periodicity, timeliness and coverage. Countries subscribe to the standard on a voluntary basis, but once committed, a subscribing member has to observe the standard and provide certain information to the IMF about its data dissemination practices for posting on the DSBB. Subscribers have some flexibility that entails them to not meet the requirements for a certain number of data categories, periodicity and timeliness while still being regarded as meeting the SDDS.

In contrast, the primary objective of the GDDS is to improve data coverage and quality for those countries that do not have comprehensive data systems. The purposes of the GDDS are to (i) encourage member countries to improve data quality;

(ii) provide a framework for evaluating the needs for data improvement and setting priorities in this respect; and (iii) guide member countries in the dissemination to the public of comprehensive, timely, accessible and reliable economic, financial and socio-demographic statistics. Both frameworks are built around the same four dimensions – data, quality, access and integrity – and four economic and financial sectors (real, fiscal, financial and external).

In relation to user needs, the SDDS/GDDS cover:

(i) many of the macro-economic and financial data series;

(ii) external debt of the public sector or general government is encouraged;

(iii) information to assist users in assessing data quality; and (iv) timeliness of data release.

The results of the second review of the SDDS announced on December 21, 1998, will extend the range of data covered by the SDDS to include:

(i) external debt, which will be allocated a separate data category in the SDDS, with breakdowns to follow internationally-agreed guidelines and the precise proposals on the transition period to be considered later in 1999;

(ii) IIP data will become a prescribed data series of annual dissemination frequency with a six-month lag and a three-year transition period closing at the end of 2001; and

(iii) comparability and comprehensiveness of country data supplied for SDDS purposes is to be enhanced through the formal establishment of quarterly certification of the accuracy of metadata³⁸ by subscribers.

In March 1999 the IMF took action to strengthen the specifications for dissemination on international reserves under the SDDS. This is covered in more detail in the section on foreign exchange reserves later in this chapter. Also, the IMF intends to conduct a third review of the SDDS by the end of 1999. By this time, the Executive Board will have revisited the monitoring of the SDDS and procedures for dealing with non-compliance; and subscribers will be expected to have established mandatory hyperlinks between the DSBB and national summary data pages of subscribers³⁹.

The Fund’s main statistical publication is the monthly International Financial Statistics. This publication is a source of data on international and domestic finance, covering most countries of the world⁴⁰.

Bank for International Settlements

The BIS ⁴¹ promotes the co-operation of central banks and provides additional facilities for international financial operations and aims to foster international financial stability⁴². The BCBS was created by the BIS in 1974 to improve collaboration between bank supervisors, and the BCBS has subsequently released

38 Where metadata comprise of a page for each data category; and for each category, detailed information on dissemination formats, summary methodology (including a statement on international comparability), an advance release calendar and a summary of observance.

39 For more detailed information see the website http://dsbb.imf.org/sdds2rev.htm

40 See the website http://www.imf.org/external/pubs/pubs/per.htm

41 The BIS is a bank whose depositors are limited to central banks and international financial institutions.

42 ‘The Bank for International Settlements: Profile of an International Organisation’, June 1998, Introduction, paragraph 1. See website http://www.bis.org/about/

guidance standards for supervision to strengthen the soundness and stability of international banking, including requirements for an effective supervisory system.

The BIS is a major source of international banking statistics⁴³, international securities statistics and derivatives and foreign exchange market statistics. These data are used for policy-related monitoring purposes by central banks and are of interest to private sector market participants.

The BIS statistics meet user requirements as follows:

(i) data on external debt vis-à-vis BIS reporting banks are compiled and published excluding domestic debt data.

(a) external debt statistics compiled on a locational⁴⁴ basis are comparable to external debt statistics produced under balance of payments conventions. Data are available for: external positions of banks in individual reporting countries by sector (all/bank/non-bank) and currency of denomination (all/total domestic/total foreign); and local positions in foreign currency of banks in individual reporting countries by sector (all/non-bank). Also available is a currency breakdown (domestic/foreign) of reporting banks’ cross-border and local positions by sector (all/non-bank/official monetary institutions); and (b) those debt statistics compiled on a worldwide consolidated basis⁴⁵ cover total BIS reporting banks’ lending to countries outside the reporting area, presented by remaining maturity, sector⁴⁶ and country. However, ‘It needs to be borne in mind that the data relate to only one aspect of international financial positions of the countries concerned, i.e. their indebtedness vis-à-vis

43 Note that these statistics are compiled on a locational (residency) and consolidated basis. The need for consolidated statistics arose in the wake of the first oil shock as borrowing countries realised they had insufficient information to evaluate the risk characteristics of the exposures of their banking systems to developing countries with increased indebtedness.

44 Locational statistics: international assets and liabilities data of banks, compiled on a residency basis, are based on the location of the reporting institution. Reporting institutions: banks that are located in eighteen industrialised countries and six offshore banking centres.

45 ‘Worldwide consolidated’ refers to the worldwide consolidation of individual banks’ balance-sheet positions. In practice, the activities of banking offices outside the principal reporting area (eighteen industrialised countries) are also included.

46 The BIS reporting system includes a broad sectoral distribution of the banks’ total claims on individual countries, showing separately interbank (bank) claims, claims on the public sector and claims on the non-bank private sector. The public sector data does not include the debt of units guaranteed by the central government.

the reporting banks’⁴⁷. The BIS advise users that the data, therefore, cannot necessarily be used as a proxy for these countries’ overall external indebtedness.

(ii) BIS information on the financial flows and positions of sectors is limited to external debt statistics of banks, and the relevant sectors are detailed in the previous point;

(iii) In terms of securities markets data, international debt securities issues⁴⁸ (excluding local currency issues by residents) for current stocks and net changes between periods are presented by currency of issue, type of issue and issuer and by geographical dissection. Domestic debt issues data for net issues and amounts outstanding are available by type of issue, by business sector (public/private) and by residence of issuer.

(iv) Derivative positions and turnover data are available for exchange-traded instruments (quarterly) and over-the-counter instruments (semi-annual for positions and triennial for turnover). The exchange-traded statistics are

‘composed of detailed data on individual contracts traded on exchanges and aggregated data by type of instrument (futures and options), type [and size] of contract and location of trade and for interest rate contracts only, maturity.’⁴⁹ For OTC derivatives, the statistics include type of counterparty, type of instrument (forwards, swaps and options), currency and maturity.

Planned changes to BIS statistics that are expected to meet user requirements more fully in the future include:

(i) for external debt statistics:

(a) the compilation and planned release of consolidated debt statistics, from end-1999 onwards, on the basis of the country of ultimate risk (i.e. country in which the guarantor of a financial claim resides and/or the country in

47 The BIS Consolidated International Banking Statistics (formerly The Maturity, Sectoral and Nationality Distribution of International Bank Lending), Basle, January 1998, Annex page 2.

48 Comprised of international bond issues and euro-note programmes.

49 The BIS Statistics on International Banking and Financial Market Activity , Basle, August 1995, page 20. This publication provides extensive detail on the scope and coverage of all BIS statistics.

which the head office of a legally dependent branch is located) in addition to the country of immediate borrower;

(b) an extension of the number of reporting countries providing locational and consolidated statistics, and a full country breakdown for the latter; and (c) consolidated statistics will be released on a quarterly, rather than

semi-annual basis, from end-1999 onwards at the latest and the reporting and publication lags will be shortened to three and four months, respectively;

(ii) for securities statistics, increased country coverage in domestic securities statistics (extension of private/public sector by country) is planned; and

(iii) for derivative statistics, separate reporting of derivative positions in the BIS international banking statistics has been proposed.

Institute of International Finance

The Institute of International Finance (IIF)⁵⁰ maintains a database of economic statistics, including historic data and projections of economic performance, balance of payments and external financing. Detailed information is available for approximately 50 emerging market economies as well as reports on regional and global economic and financial issues of current interest. These data are available to the IIF’s global members⁵¹, rather than the more general access accorded users by the BIS, IMF, OECD and World Bank.

External debt data from the IIF are relied upon extensively by banks, who ‘are not generally aware that the BIS quarterly data are a source series for the IIF data on external debt. The IIF estimates of external debt are made on a country-by-country basis but do not provide systematic information on the relationship of these estimates to those of other international sources’⁵².

50 See website http://www.iif.com/

51 Membership of the IIF is comprised of commercial and investment banks; increasing numbers of insurance companies, investment management firms, multinational firms and trading companies, export credit agencies and multilateral organisations. The IIF has more than 300 members in more than 50 countries.

52 On the Use of Information and Risk Management by International Banks, BIS, Basle 1998, page 4.

OECD

The OECD releases a wide range of economic statistics, based on the data reported by individual countries, that support its ‘vocation… to build strong economies in its member countries, improve efficiency, hone market systems, expand free trade and contribute to development in industrialised as well as developing countries.’⁵³

In relation to the specified data requirements of users in Appendix III, the OECD releases data on:

(i) total external debt stocks and flows of 174 developing and transition countries and territories, compiled from creditor institutions holding the debt, that are released by type of creditor or finance; and

(ii) securities issues data and information on capital raised by equity issues for a limited number of countries.

World Bank

The World Bank is a lending institution whose aim is to help integrate countries into the wider world economy and promote long-term economic growth that reduces poverty in developing countries, and who makes loans for both policy reforms and projects⁵⁴. Through this work, the World Bank has become the sole repository for statistics on the external debt of developing countries on a loan-by-loan basis⁵⁵.

As noted in Appendix III, external debt data are dissected into public (and publicly guaranteed) and private non-guaranteed (by the private sector) debt, of which long-term debt is provided by foreign currency composition; domestic currency debt is not included. Because of the inclusion of publicly guaranteed debt in the public sector, the sector classification of debt is not consistent with SNA/BPM5. The World Bank

53 About OECD: OECD’s origins, paragraph 1. See website http://www.oecd.org/about/origins

54 ‘Questions and Answers about the World Bank’, 1998. See website http://www.worldbank.org

55 Global Development Finance, World Bank, 1998, page ix.

provides projections of scheduled payments of principal and interest for the next 10 years (e.g. projections for 1998 to 2007 when 1997 actual data are published) however, this information is released with a one-year lag.

2.3.2 Joint IFI releases

Joint international releases of statistics reconcile the creditor and debtor sources and frameworks, with the aim of providing users with a more comprehensive view of the statistics. Relevant recent examples of publications and reports of international working groups are discussed below.

Debt related releases

Prominent examples of such releases exist for external debt statistics, and include the publication Statistics on External Indebtedness: Bank and trade-related non-bank external claims on individual borrowing countries and territories , BIS/OECD, January 1999, and the work of the Interagency Task Force on Finance Statistics⁵⁶. This Task Force has recently posted a set of country tables to the internet that supplement existing BIS, OECD, and World Bank creditor data on banks loans and official lending with data from market sources on debt securities issued in international market and on Brady bonds⁵⁷. This co-operation between international agencies is welcome. However, as noted by the IIF in its Report of the Working Group on Transparency in Emerging Markets Finance, although these publications are useful, gaps and overlaps remain in the coverage of these sources of external debt, as do conceptual differences. According to some outside observers, ‘the data do not together correspond to a comprehensive measure of external debt’⁵⁸.

56 This task force is comprised of representatives from the BIS, European Central Bank (ECB), Eurostat, IMF, OECD and World Bank.

57 Brady bonds , named after US Treasury Secretary Nicholas Brady, were issued in the late 1980’s in exchange for commercial banks loans in order to reduce the debt burden on certain emerging markets.

58 Report of the Working Group on Transparency in Emerging Markets Finance, IIF, March 1999, page 14.

Foreign exchange reserves

The recent Asian crisis and its aftermath highlighted shortcomings in the availability of information associated with the on and off-balance sheet foreign currency activities of central banks and other public sector agencies⁵⁹. Existing SNA and BPM5 frameworks contain standards for the release of data on reserve assets, but they do not require the incorporation of forward commitments/claims on reserves. It was against this background that the working group of the Euro-currency Standing Committee (ECSC) prepared a report on Enhancing the Transparency of the Authorities’ Foreign Currency Liquidity Position, which forms part of a series of initiatives designed to improve transparency in the global financial system⁶⁰. This was closely followed, in December 1998, by a document reviewing the proposed disclosure template of authorities’ foreign currency position.

The authorities’ liquidity position is considered one piece of information essential for assessing the foreign currency liquidity risk facing a country, where a fuller assessment of this risk requires broader information of the liquidity position of both the public and private sectors⁶¹. The disclosure template aims to be ‘comprehensive with respect to the coverage of both institutions and financial instruments and which prescribes valuation principles that are consistent with the focus on liquidity’⁶². This template applies to disclosure of information by the reporting sector— monetary authorities⁶³ and other central government, excluding social security— and extends existing requirements for reserve assets by requiring the disclosure of short-term drains (predetermined and contingent) on foreign currency reserves, by residual maturity.

This disclosure template was considered by the IMF in its review of the standards for public dissemination of data on international reserves, and has been incorporated into the SDDS, as announced on 26 March 1999. The IMF Executive Directors

59 Bank for International Settlements, Press Statement, Enhancing Transparency Regarding the Authorities’ Foreign Currency Liquidity Position, September 1998, paragraph 2.

60 Refer also to the report on Transparency and Accountability released by the G22, the steps taken by the IMF to strengthen the SDDS and BIS efforts to improve its international banking statistics.

61 Enhancing Transparency Regarding the Authorities’ Foreign Currency Liquidity Position , ECSC, Basle, September 1998, page 2.

62 Ibid, paragraph 4.

63 As defined in BPM5.

considered that the recent international financial crises demonstrated the importance of disseminating information on reserves and related items with a short lag and a relatively high frequency⁶⁴ and have agreed that the SDDS will prescribe dissemination of:

(i) full data corresponding to the new template on a monthly basis, with a lag of no more than one month, although data on total reserve assets would still be prescribed for dissemination on a monthly basis with a lag of no more than one week; and

(ii) data for the full template on a weekly basis, with a one-week lag, is encouraged.

The transition period for the observance of the new SDDS requirements for international reserves be through 31 March, 2000 and, presuming that most subscribing countries will start providing this information, the subsequent improvements in the disclosure of authorities’ foreign currency position will go some way to meeting identified user requirements.

2.4 Summary

The range of data frameworks is diverse. In researching this topic, it was apparent to the project team that finding the available information at the international level on financial markets data was time-consuming. In addition, from the discussion at the Workshop, it would appear that users are not as aware of the range of available information as they could be (or should be). This may be partly due to the variety of sources available (web sites, publications, information papers, etc), the absence of an active education programme for users of these data within countries or by IFIs, or because of the range of disclosure practices employed by countries and IFIs.

Given the above, we recommend that IFIs give serious consideration to linking their data information sites to improve user-friendliness and user access to information.

Perhaps an additional page covering the financial market information provided by

64 IMF Strengthens Standards for Public Dissemination of Data on International Reserves , IMF, Public Information Notice 99/25, 26 March 1999.

IFIs— with appropriate metadata— could be included on the IMF’s Dissemination Standards Bulletin Board; a central point from which users could explore further. The project team would be content for the information contained in this report to be used as a basis for the development of such a page.