Current Challenges and the Future of Central Bank Statistics

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Monday 19 April 2010

New Data Needs and Management Challenges

Identifying new statistical needs for policymaking
L.H. Hoogduin, Executive Director, De Nederlandsche Bank

Central bank statisticians must deliver relevant and reliable data to meet users’ needs. But what are those needs and how has the financial crisis changed them? This session looks at two of the most important functions of modern central banks – monetary policy and financial stability – and how statistics are used in decision-making. The speaker will consider, from the perspective of a senior policymaker, how demands are changing through the use of new models, not just for the content but also for the presentation of statistics. Finally, the group will discuss what new data needs have emerged in the wake of the financial and economic turmoil, and how these can be met.

Managing central bank statistics
Introductory roundtable led by Peter Bull, Former Head and Current Advisor to the Statistics Directorate, European Central Bank

The chairman will outline the most significant management challenges to meeting the expectations placed on the statistics office – and identify how these expectations and demands are shifting. Participants will be asked to give a brief account of their own system and processes for gathering, managing and presenting statistics. The session also allows delegates the opportunity to coordinate their thinking about which themes will be discussed in detail over the course of the seminar.

The organisation and management of central bank statistics: key issues
Peter Bull

This session will consider questions relating to reporting lines, codes of practice, and the separation of statistics and policy roles. It will also address relationships with external suppliers of statistics, and the key issues related to the legislation required for this. The speaker, who was responsible for setting up a statistics division from scratch for the European Central Bank (and its predecessor, the European Monetary Institute), will outline what the appropriate objectives and operational procedures are for the statistics function within a central bank, and highlight the approaches taken by a number of central banks.

Role of Statisticians in Supervisory Data Analysis
Angela A. Sere-Ejembi, Head, External Sector Statistics Division, Central Bank of Nigeria

The importance of supervisory data analysis is in its ability to indicate and serve as early warning signals of crisis in the financial system, with specific reference to the banking system. The analysis, in addition, provides a basis for ongoing monitoring of performance. This session will be presented in sections, the first looking at an introductory overview, followed by definition of the subject matter. Further, the speaker will explain some approaches to the application of statistical analysis to the data generated from both on- and off-site supervision. The submission is that stress tests and operational data could benefit from the application of statistical techniques to estimate banks ratings and probability of default in the attempt to more effectively realize, assess and quantify problematic bank situation.

Group discussion: organisation and management
Led by Peter Bull

The day concludes with a workshop that presents an opportunity for delegates to discuss the most significant managerial and organisational challenges they face on a day-to-day basis and benefit from each other’s expertise and experience in confronting common problems. Where should the statistics function be located in a central bank? How should it be structured? How should its relationships with users be managed?

Tuesday 20 April 2010

Emerging Trends in Balance-of-Payments and Financial Statistics

Integrated macroeconomic accounts and the central bank’s role
Stuart Brown, Statistical Consultant, Former Division Head, UK Office for National Statistics

The central bank is responsible for collecting only a subset of national economic statistics. It acts both as a supplier of this specialised information and as a consumer of wider statistical information. This session addresses why the system of macroeconomic national accounts should be viewed as an integrated framework, and outlines the central bank’s typical role as supplier of money, banking and balance-of-payments statistics. The speaker will also examine how formal and informal working relationships between a central bank and a national statistical office can be established, including common definitions and procedures, and codes of practice.

Approaches to compiling balance-of-payments statistics
Stuart Brown

Central banks are often responsible for the compilation of balance-of-payments statistics, but there are two competing approaches to this task. Countries with a history of regulatory capital controls have typically retained a transactions approach, collecting data on customer transactions via the banking system. Others use a survey approach to collect aggregate data from end-users. Increasingly a mixture of the two approaches is being adopted. The speaker will describe the use of security databases to compile statistics on portfolio investment level, discuss the strengths and weaknesses of the approach, their relative advantages and disadvantages of each method, as well as looking at mixed models, different data sources, international standards, the measurement of stocks and flows.

Compiling and presenting remittance statistics
Jens Walter, Deputy Head, Balance of Payments and IIP Division, Deutsche Bundesbank

The increasing importance of migrant remittances has now been recognised by developed and developing countries alike. Indeed the need to have timely and accurate data on remittances within the framework for compiling balance-of-payments statistics is increasingly recognised. Precise estimates of global remittances
flows are difficult to make due to the significant share of remittances transferred via informal channels and differences in reporting practices and methodologies used by countries. This session will survey the work being done on the international level since then to improve the collection of remittance statistics and provide examples of how remittance data can be collected for different transaction channels on a national level.

Best practice in collecting banking statistics
Karsten von Kleist, Deputy Head of International Financial Statistics, Bank for International Settlements

The compilation of monetary statistics from banking data is another core function of central banks, and remains an important consideration in monetary policy. The speaker will discuss the IMF standards for monetary statistics and give some examples of definitions used around the world. He will consider a number of practical issues of measurement including stocks versus flows, how the data relate to other key statistical areas, and what lessons can be drawn from the financial crisis on international cooperation and coordination in the collection and standardisation of cross-border banking statistics.

Lessons from participants’ experience
Workshop led by Peter Bull

In this session the participants will have an opportunity to work in syndicated groups to share their experiences in specific work areas.

Wednesday 21 April 2010

Delivering Statistics in a Decentralised Environment

Achieving better reference data
Francis Gross, Head of division, External Statistics, European Central Bank

Reference data on instruments and entities has long been and still is a largely neglected backwater of statistics and economic analysis and of data processing in the financial industry. However, it represents the most basic infrastructural layer on which all other data is built and structured. Moreover, when reference data exists, accessibility and usability are often an issue. Lack of standards has now become a major impediment to the large-scale use of computers and information technology that is required to increase market transparency, understand systemic risk and improve efficiency and operational risk. Standardisation of reference data seems to be a prerequisite to progress. The presentation will cover:
• The ECB’s approach to and experience with micro-data-based statistics
• Understanding the reference data challenge
• Standardisation of reference data and the concept of a utility

New demands: data on financial derivatives
Karsten von Kleist, Deputy Head of International Financial Statistics, Bank for International Settlements

Nothing has more forcefully underlined just how systemically important the now massive global market for financial derivatives has become than the financial turmoil that started in August 2007. Yet central bankers and financial regulators around the world have frequently pointed out that they lack timely and accurate data on various derivative markets, particularly credit default swaps and other prominent structured products. Given that these markets still largely operate in non-transparent over-the-counter environments, what can official statisticians do to improve statistics on financial derivatives? In this session, the speaker will present an overview of the approaches being taken on a national and international level to improve data collection on derivatives, and suggest potential fruitful steps for the future.

Case study: Exploring micro-databases for statistical purposes Ana de Almeida, Deputy Director, Statistics Department, Bank of Portugal

The use of micro-databases and item-by-item reporting, covering different areas of the economy and the financial markets, has been helping central banks worldwide to circumvent a number of shortcomings related to the conventional data collecting systems. The use of such data can deliver significant reductions in respondent burden, higher data quality and enhanced responsiveness to ad hoc information requests from the users. The Bank of Portugal has been following this approach, exploring the statistical potential of various
sources of information, including a number of different administrative databases. This session will review the work being done by the Bank of Portugal in re-using and sharing micro data for statistical purposes, and will address key operational issues related to the implementation of this approach.

Case study: Challenges of data management and data dissemination in a decentralised environment.
Maxwell Musongole, Assistant Director, Statistics, Bank of Zambia

This session will look at the impact of data management and dissemination on quality of data; and address the aspects of uncertainty of data. The speaker will also look at the challenges faced in dealing with uncertainty of data. When dealing with data collection challenges the speaker will address the challenges of data collection, sources of data, credibility of data sources, and the impact all these have on data quality. The session will move on to data dissemination issues; what is the importance and consistency in data dissemination, challenges of creating confidence in data, challenges of adherence to release calendars, meeting stakeholder expectations. Finally the presentation will look at stake holders and their role in data management and dissemination addressing the challenges in coherence of data between stake holders and challenge of data reconciliation amongst stake holders.

Thursday 22 April 2010

Lessons Learnt from the Financial Crisis

What are the data needs for a macroprudential approach?
Bernd Braasch, Director, Financial Stability Department, Deutsche Bundesbank

The financial crisis has clearly underlined the relevance of a macroprudential approach in financial stability analysis. The global financial turmoil revealed information gaps on cross border linkages and related systemic risks. Moreover, with the financial globalisation, new investors and financial innovations, has been contributing to changing the market dynamic, the dynamic of contagions across financial markets and countries and spill over effects into the real economy. The group are invited to discuss their resourcing issues and reflect their needs towards the collection of data.

Statistical implications of the ongoing global crisis: the IMF view
Alfredo Leone, Deputy Director, Statistics Department, International Monetary Fund

The International Monetary Fund has an important influence on central bank statistics through its data standards and reporting requirements. These requirements can exert a pull on the resources of a central bank and its statistics function, but more recently efforts have been made to lower these costs through various online reporting processes and technical assistance by the Fund. This session will examine the central role of statistics in IMF Article IV consultations. It will also cover key operational issues related to current and new reporting requirement, including the General Data Dissemination System (GDDS), the Special Data Dissemination Standards (SDDS), data quality, IMF manuals including financial soundness indicators, International Financial Statistics, and the Fund’s technical assistance role in statistics. The role of the fund in addressing information gaps highlighted by the ongoing financial crisis will also be examined.

Lessons and key issues for the future of central bank statistics
Led by Peter Bull

This final discussion session will aim to maximise the practical benefit of the week’s key themes and issues. Participants will identify and discuss how the experiences and ideas from earlier sessions could be specifically applied to their own institution’s challenges and priorities and solutions to the future.