Public Information Notice: IMF Executive Board Reviews Progress in Members' Provision of Data to the Fund for Surveillance Purposes
November 14, 2012
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.
November 14, 2012
On November 1, 2012, the Executive Board of the International Monetary Fund (IMF) considered the staff paper 2012 Review of Data Provision to the Fund for Surveillance Purposes.
Timely, accurate, and comprehensive data provision to the IMF is essential for the IMF’s surveillance activities. The framework for data provision to the Fund for surveillance purposes is based on the Articles of Agreement and relevant decisions of the Executive Board, and relies on a cooperative approach. The previous Review in May 2008 expanded the list of data items to be reported to the Fund under the 2004 Decision on Strengthening the Effectiveness of Article VIII, Section 5; introduced a new classification rating system for the data adequacy assessment; and strengthened the procedures for following up on potential breaches of Article VIII, Section 5. These enhancements have generally worked well.
Following the global crisis and the 2011 Triennial Surveillance Review (TSR), the data needs for surveillance have evolved substantially. The survey of mission chiefs conducted for the 2011 TSR indicated that the lack of data was the biggest impediment to IMF surveillance work on macro-financial issues. Against this background, the staff paper reviewed recent trends in the provision of data on key data sets maintained by the Fund, discussed how the global initiative to close data gaps under the auspices of the G-20 as well as other initiatives could help address the priority areas identified in the 2011 TSR, and proposed improving reporting of data deficiencies in staff reports and strengthening the Statistical Issues Appendix of Article IV reports to focus on financial sector data. Finally the staff paper discussed ensuring greater consistency between GDDS data plans for improvement, technical assistance and the data deficiencies identified in Article IV consultations.
The recommendations in this Review aim to strengthen the existing data provision framework. Staff plan to update the data provision guidelines, reflecting the Board’s discussion of the 2012 Review.
Executive Board Assessment
Executive Directors welcomed the timely review of data provision to the Fund for surveillance purposes. They noted that significant progress has been made since the last review in 2008, and considered that the current data provision framework remains adequate. Nevertheless, Directors agreed that there remains scope for strengthening its implementation within the existing resource envelope, drawing on the conclusions of the 2011 Triennial Surveillance Review and the data gaps revealed by the global financial crisis. To this end, Directors broadly supported the recommendations to further strengthen data provision and encouraged staff to continue to improve the treatment of data issues in surveillance.
Directors saw merit in improving clarity and candor in assessing and communicating the adequacy, quality, and timeliness of data provision to the Fund, along the lines proposed in the staff report. They generally considered that, while a new classification of data adequacy introduced in 2008 has worked relatively well, clearer instructions on how to draw distinction among the different categories would help ensure uniform application. Directors also supported the proposals to identify more prominently in Article IV staff reports the main data deficiencies that hamper surveillance, progress in implementing past recommendations, and data sources. Directors supported efforts to ensure consistency in addressing data deficiencies among Article IV staff reports, the General Data Dissemination System, and Fund technical assistance on statistics.
Directors stressed the importance of financial sector data for both the Fund and the member countries, noting that data limitations may impede financial and external stability assessments. They supported modifying the Statistical Issues Appendix to focus more on data for financial sector surveillance and, where relevant, progress on the G-20/IMFC Data Gaps Initiative and on adherence to the recently approved SDDS Plus for countries that have indicated their intention to adhere to the initiative, while also making further progress in areas where the conceptual statistical framework needs development.
Directors broadly supported further efforts to improve key data sets: International Investment Position, Currency Composition of Foreign Exchange Reserves (COFER), financial soundness indicators, general government debt, and monetary and financial data, including through the adoption of standardized reporting forms. Directors underscored the need for close cooperation and consultation with member countries, mindful of the reporting burden, capacity constraints, and country-specific settings, including institutional arrangements, and with due regard to the confidentiality of information. They welcomed ongoing efforts to broaden country participation in the COFER database and encouraged non-reporters to do so. Some Directors noted that data on foreign exchange intervention could also prove useful for Fund surveillance.
Directors considered that procedures for following up on potential breaches of Article VIII, Section 5, have been broadly effective and that no changes to the framework are necessary at this time. However, they saw merit in drawing lessons from a review of prolonged open cases, with a few seeking scope for shortening the resolution process.
Directors stressed the importance of working closely with other international agencies to fill data gaps while minimizing the reporting burden for countries. In particular, they encouraged staff to continue to cooperate closely with the Financial Stability Board (FSB) in developing a dataset for global systemically important financial institutions (G-SIFIs), with appropriate data sharing procedures among official institutions on a strictly confidential basis. A number of Directors noted that legal challenges remain to be taken into account with respect to the Fund’s access to G-SIFI individual-to-aggregate data, and looked forward to a decision on this issue at the upcoming FSB plenary. Directors also saw a need to liaise more with relevant institutions with expertise to address labor market data deficiencies.
Directors looked forward to an updated guidance note on data provision reflecting today’s discussion. They agreed that the next review of data provision should take place in 2017.