IMF Strengthens Financial Data Dissemination

• Author: Mohammed El Qorchi and Nolvia Saca Saca
• Position: IMF Statistics Department

The recent financial crisis has heightened the need to put in place policies and safeguards that would help prevent the occurrence of similar crises in the future. One of the areas identified by the international community as key in crisis prevention is the availability of timely and more detailed financial data that could provide early warning signals of impending risks and vulnerabilities. The SDDS (see box) can help reduce the size and transmission of shocks by allowing investors to differentiate better between the economic and financial performances across countries.

Closing the gaps

In response to requests by the International Monetary and Financial Committee (IMFC) in April 2009, and building on work for the Group of Twenty (G-20) economies, the IMF and the Financial Stability Board (FSB) have identified data gaps pertaining to credit, liquidity, leverage, and the solvency risks facing financial systems; cross-border financial linkages; and vulnerabilities facing domestic sectors and markets.

As a result, the IMF will contribute to addressing these gaps by:

- including seven financial soundness indicators into the SDDS on an "encouraged" basis (that is, not legally "prescribed" under the SDDS) to strengthen information about the health of the financial sector and better detect system risks;

- moving to quarterly dissemination (from annual) of the international investment position (IIP) data, with a maximum lag of one quarter, on a "prescribed" basis and a four-year transition period, to better capture cross-border linkages;

- adding a simplified table on countries’ external debt by remaining maturity (on an "encouraged" basis) to better monitor the vulnerability of domestic economies to external shocks; and

- accelerating the timing of the IMF’s Eighth Review of the Data Standards Initiatives to within 24 months?at least a year and a half earlier than previously anticipated.

The IMF’s data dissemination standard

In the wake of the financial crises in the 1990s, there was broad...