Dissemination of FSI Ratios and Related Data

Pages:138-144
SUMMARY

Introduction. Dissemination Practices. A Framework for Disseminating FSIs. Module 1. The core and encouraged FSIs. Financial sector overview. Deposit takers. Other financial corporations. Nonfinancial corporations. Module 2. Specific information on FSIs disseminated.

 
INDEX
FREE EXCERPT

Page 138

Introduction

12.1 To enhance the transparency of their financial system, countries are encouraged to disseminate the core and other FSIs on a frequent basis. This chapter provides a standard framework for the dissemination of the core and encouraged FSIs. It can be adapted to meet specific country circumstances. The chapter also provides additional frameworks for the dissemination of information that allow analysts to interpret the FSI data in the context of specific country circumstances, including the structural features of the financial system. Dissemination of this additional information can be essential, because disseminating FSIs alone may not provide an adequate basis for their interpretation due to the complexity of information they encapsulate, the range of data sources used in their construction, and the various accounting rules under which the data can be compiled.

12.2 While FSIs provide a variety of information on the health and soundness of the financial system that is essential for macroprudential analysis, they are not sufficient in their own right to provide a comprehensive analysis of the vulnerabilities of a country's financial system. Other factors that are important, but lie outside the scope of the Guide, include the quality of supervision and of corporate governance, as well as the incentives facing financial corporations, including the legal framework and the role of government in the financial system. Some of these factors are discussed in the next part of the Guide. It should be recognized that coming to a judgment on the strength and vulnerability of any financial system by combining these qualitative factors with the quantitative FSI data is not an exact method of analysis.

Dissemination Practices

12.3 As noted above, it is recommended that FSIs be disseminated on a frequent basis. The availability of information can vary among FSIs-for instance, information on interbank interest rates will be available more frequently than information on the geographic distribution of lending. Nonetheless, countries might work toward releasing at least a basic, rather than the full, FSI data set on a quarterly basis, within one quarter of the reference date. Some FSIs, such as financial market indicators, may be available for dissemination more frequently. Dissemination of a basic data set on a quarterly basis allows new developments to be identified at an early stage and provides time-series data that can be used to assess variations in FSI data across time and in comparison with other key economic data.

12.4 The data covered in a basic data set can vary depending on national circumstances, but as a minimum it should include the core FSIs specified in this Guide. Preferably, the data with a quarterly frequency should cover institutions that account for a significant part of the assets of the reporting population; complete coverage should be achieved with at least annual frequency. The need for dissemination of encouraged FSIs depends on national circumstances.

12.5 When data are disseminated, provisional data should be clearly indicated and any major revisions explained by way of notes to the published tables. Breaks in series, for example, due to changes in the reporting population, should be clearly identified and quantified where possible. Such explanations are particularly important given that the entrance or departure of a few institutions from the reporting sample could potentially have a significant impact on the FSIs. More generally, metadata describing in detail the content and coverage of the FSIs, as well as the accounting conventions and other national guidelines reflected in the data, should be made publicly available.

12.6 Given the wide range of source data needed for compiling FSIs, data from various agencies (for example, the central bank, the statistical agency, and the supervisory agency) are likely to be included. Nevertheless, as noted in Chapter 10, it is recommended that one agency take the lead and the responsibilityPage 139 for the dissemination of all the FSIs produced in the country on one centralized website and/or in a paper publication. Such an approach facilitates access by users. The lead agency should be designated as the contact point for user queries on national FSIs.

A Framework for Disseminating FSIs

12.7 Set out below is a dissemination framework based on two modules. These modules organize information into a series of tables aimed at providing a coherent body of information. The two modules and their elements are (1) the FSIs and related data, and (2) metadata required to interpret the FSIs.

Module 1

- The core and encouraged FSIs. Table 12.1 provides an illustrative presentation of the list of indicators on both a domestic controlled cross-border and domestic consolidated basis. It is recognized that alternative possibilities for the ordering of the list exist. Time-series data are encouraged, as are graphical presentations that can facilitate the identification of trends in FSIs and complement the data series themselves. 1

- Financial sector overview. The Guide sets out some structural indicators for deposit takers and other financial corporations (see Table 12.2). These indicators go beyond the core and encouraged sets of FSIs in this Guide.

- Sector-level income and expense and balance sheet statements. These statements provide the underlying data series used to calculate many FSIs. The Guide considers that disseminating these statements would support the analysis of the FSI data sets, although such dissemination goes beyond the agreed FSIs. Such data can help gauge the magnitudes of the underlying amounts, enable interpretation of ratios-especially whether movements in ratios over time are caused by changes in the component elements of the numerator and/or denominator-and allow additional FSIs to be calculated as country circumstances require. The tables for disseminating the sector-level income and expense and balance sheet data are presented in Chapter 4-Table 4.1 (Deposit Takers), Table 4.2 (Other Financial Corporations), Table 4.3 (Non- financial Corporations), and Table 4.4 (Households).

The core and encouraged FSIs

12.8 Table 12.1 provides an illustrative presentation of FSI data (1) on a domestically controlled, cross-border consolidated basis and (2) on a domestic basis (with data for deposit takers and other corporations on a domestically consolidated basis). The core FSIs are highlighted in bold italics. For deposit takers, the Guide requires the compilation and dissemination of data on a domestic controlled cross- border consolidated basis. Data on a domestically consolidated basis might be separately compiled if the authorities believe such data would contribute materially to their financial stability analysis.

12.9 As noted in Chapter 5, national authorities may see a need to compile separate FSIs on subsidiaries of foreign controlled deposit takers (also consolidated cross-border with their own branches and deposit- taking subsidiaries in other countries, if any); such information could be disseminated as an additional column in the table for deposit-taking FSIs only.

Financial sector overview

12.10 As noted in Chapter 2, each country has its own unique financial structure, and this will affect the range of data available for calculating FSIs and any assessment of FSIs that are disseminated...

To continue reading

REQUEST YOUR TRIAL