Pilot Project on Concentration and Distribution Measures for a Selected Set of Financial Soundness Indicators
IMF Working Papers, February 12, 2016
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- Pilot Project on Concentration and Distribution Measures for a Selected Set of Financial Soundness Indicators
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Bibliographic details
- Authors: Joe Crowley, Plapa Koukpamou, Elena Loukoianova, André Mialou
- Published: February 12, 2016
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781498337014.001
Overview
- Pilot project launched in July 2014 by the IMF’s Statistics Department to test augmenting the IMF’s financial soundness indicators (FSIs) with concentration and distribution measures (CDMs).
- Objective: capture tail risks, concentrations, variations in distributions, and the volatility of indicators over time that simple averages can miss.
- Volunteer participants reported a trial set of CDMs to assess analytical usefulness and identify concerns such as confidentiality and reporting burden.
Key findings
- The results of the pilot suggest that CDMs can help detect financial sector risks.
- The analytical usefulness of CDMs appears to justify the additional reporting burden.
- Concerns identified by participants included confidentiality and reporting burden.
- The pilot indicates further input from participating countries and potential data users should be sought.
- Further refinement of the reporting requirements and the CDMs themselves may be needed.
Policy implications and next steps
- Consideration of CDMs for regular augmentation of FSIs given their ability to detect tail risks and distributional features missed by averages.
- Seek further consultation with participating countries and potential data users to address confidentiality and reporting burden concerns.
- Refine reporting requirements and the CDMs themselves based on pilot feedback and additional input.