The 1980s saw an unprecedented growth in the volume and the complexity of international financial transactions (Chart 1). This has been accompanied by a significant deterioration in the coverage and quality of the data. As a result, it has become very difficult, and at times impossible, for policymakers to base judgments on reported balance of payments statistics, particularly statistics on international capital flows. Unless appropriate action is taken, there will almost certainly be a further deterioration, with inevitable consequences for policymaking.