Interim Report for the Eighth Review of the
IMF's Data Standards InitiativesPublic Information Notice (PIN) No. 11/33
March 9, 2011
Public Information Notices (PINs) form part of the IMF's efforts to promote transparency of the IMF's views and analysis of economic developments and policies. With the consent of the country (or countries) concerned, PINs are issued after Executive Board discussions of Article IV consultations with member countries, of its surveillance of developments at the regional level, of post-program monitoring, and of ex post assessments of member countries with longer-term program engagements. PINs are also issued after Executive Board discussions of general policy matters, unless otherwise decided by the Executive Board in a particular case.
On February 28, 2011, the Executive Board of the International Monetary Fund (IMF) discussed the staff Interim Report for the Eighth Review of the Fund’s Data Standards Initiatives.
The Interim Report follows recent IMF Executive Board discussions at the time of the Seventh Review of the Fund’s Data Standards Initiatives in December 2008 and its discussion on broadening financial indicators in the Special Data Dissemination Standard (SDDS) (http://www.imf.org/external/np/sec/pn/2010/pn1041.htm) in March 2010, which led to modifications of the SDDS and the General Data Dissemination System (GDDS). In
March 2010 the IMF Executive Board agreed to accelerate the timing of the Eighth Review of the Fund’s Data Standards Initiatives to within 24 months―at least a year and a half earlier than previously anticipated, and requested an interim briefing prior to the Eighth Review of Data Standards Initiatives within about a year.
The global financial crisis has highlighted areas for statistical development, especially for countries with systemically important global financial sectors. The Interim Report was built on the work for the Group of 20 economies (G-20) and paves the way for the preparations of the Eighth Review of the Fund’s Data Standards Initiatives to fill data gaps and promote transparency through data dissemination. Improved data standards will further contribute to the Fund’s work to strengthen bilateral and cross-country surveillance.
Discussions of the interim report included several possible proposals that could be made at the time of the Eighth Review of the Fund’s Data Standards Initiatives, including adoption of the most recent versions of the five main internationally accepted macroeconomic statistical methodologies as a requirement under the SDDS, after an appropriate transition period, to enhance cross-country and cross-sector data comparability. In addition, following the Eighth Review and Board approval, the SDDS could prescribe hyperlinks to longer time series and more detailed data via the National Summary Data Pages (NSDP). The report also presented the case for revisiting timelines in the context of the SDDS nonobservance procedures.
The interim report explored the possibility to create an SDDS Plus as part of the Fund’s Data Standards Initiatives. The SDDS Plus would be an upper tier of the Fund’s Data Standards Initiatives to help address data gaps identified during the global financial crisis. The SDDS Plus would be designed to be fully consistent with the Fund’s mandate on the stability of the international monetary system and on surveillance, and would aim to support other Fund initiatives.
Executive Board Assessment
Executive Directors welcomed the opportunity to offer preliminary views on the proposed themes for the next review of the Fund’s Data Standards Initiatives. They took note of the satisfactory progress with the recent modifications to the data standards, including the inclusion of financial soundness indicators in the SDDS, and aligning the GDDS with the SDDS. Directors were encouraged by the positive overall feedback received from subscribers, participants, and other stakeholders, while noting areas where there is scope for improvement.
Directors noted that the global financial crisis has highlighted the need for high quality, comparable, and timely data that are crucial for early detection of risks and vulnerabilities. They stressed that any new initiatives to strengthen data dissemination should be carefully designed and implemented in a cost-effective and well-coordinated manner. This requires continued close consultation with national authorities and international standard-setting bodies, provision of appropriate technical assistance, and adoption of a flexible, pragmatic approach that takes account of country-specific circumstances and resource implications for both the Fund and member countries.
Directors broadly supported further work on enhancements to the SDDS, and looked forward to considering concrete proposals at the time of the Eighth Review in 2012. They saw merit in the proposals to enhance data quality and comparability by prescribing the internationally accepted macroeconomic statistical methodologies, with appropriate transition periods, and to add hyperlinks to longer time series and more detailed data on National Summary Data Pages. Many Directors were open to considering steps to enhance the credibility of the SDDS nonobservance procedure, possibly by introducing rule-based time limits. A few cautioned that such a move could undermine the cooperative approach underlying the SDDS. Proposals to streamline the SDDS were generally considered sensible, although some Directors preferred to keep the Advance Release Calendar flexibility options.
Directors recognized that, while a lack of data was not a main cause of the global financial crisis; the crisis has revealed serious data gaps in key areas where interlinkages across institutions and markets could pose risks and vulnerabilities to the national and global financial systems. This argues for consideration of an efficient way to address these gaps, especially for countries with systemically important global financial sectors. Accordingly, most Directors supported further work on a proposal for an SDDS Plus as an additional tier of the Fund’s Data Standards Initiatives, along the broad outline and modalities mapped out in the interim report. A number of Directors wished to move cautiously, calling for further consultations on costs and benefits, to be informed also by the findings of the ongoing G-20 Data Gaps Initiative, before they could endorse the creation of an SDDS Plus. Directors noted the challenges in mandatory reporting of new data categories for which compilation methodologies still vary across countries. They acknowledged the difficult tradeoffs among frequency, timeliness, quality, and coverage.
Directors highlighted the caveats that should be borne in mind when taking forward work on the SDDS Plus proposal. First, although the data categories under consideration for the SDDS Plus are broadly appropriate, the scope and timeliness requirements for certain data sets—particularly for general government operations and real estate indices—warrant a closer look, with a view to ensuring data quality, cross-country comparability, and consistency with other statistical frameworks. Second, further discussion is needed on how best to take into account domestic legal constraints on disclosing certain confidential financial data without undermining international efforts to strengthen public disclosure standards. Third, reflection on appropriate transition periods will be necessary to accommodate country-specific conditions of potential subscribers.
Directors underscored that close collaboration with national data providers and relevant international bodies—in particular the Financial Stability Board, the Bank for
International Settlements, and the Inter-Agency Group on Economic and Financial
Statistics—will be necessary to resolve procedural and operational issues and avoid overlap with other data initiatives. They looked forward to a fruitful discussion on the possible modalities for addressing data gaps identified by the recent crisis, along with further analysis of the resource implications, in the context of the Eighth Review.
The discussion also brought to the fore the need for a stronger framework for monitoring cross-border capital flows, including by making further progress in disseminating international investment position data. Directors also looked forward to an expanded country coverage on the Principal Global Indicators website, and to further harmonization of international accounting standards.