This paper reports on developments in the Data Standards Initiatives since the Seventh Review of the Fund’s Data Standards Initiatives (December 2008), and presents proposals for further enhancing the SDDS, and for data categories for the new higher tier of the data standards, the SDDS Plus. The SDDS Plus is primarily intended for subscribers to the SDDS with systemically important financial sectors while contributing to address further the data gaps revealed in the global financial crisis. This new tier is designed to enhance and supplement the Fund’s Data Standards Initiatives and not to replace the SDDS.

Abstract

This paper reports on developments in the Data Standards Initiatives since the Seventh Review of the Fund’s Data Standards Initiatives (December 2008), and presents proposals for further enhancing the SDDS, and for data categories for the new higher tier of the data standards, the SDDS Plus. The SDDS Plus is primarily intended for subscribers to the SDDS with systemically important financial sectors while contributing to address further the data gaps revealed in the global financial crisis. This new tier is designed to enhance and supplement the Fund’s Data Standards Initiatives and not to replace the SDDS.

I. Introduction

1. The International Monetary Fund (IMF) introduced the Data Standards Initiatives in the mid 1990s following the Mexican financial crisis for the purpose of promoting the transparency of economic and financial statistics.The data standards initiatives consist of two tiers: (1) the Special Data Dissemination Standard (SDDS), a monitored standard designed to guide countries that have or might seek access to international capital markets in the dissemination of economic and financial data to the public; and (2) the General Data Dissemination System (GDDS), a statistical development framework designed to guide countries in the provision of economic, financial, and socio-demographic data to the public.

2. The Fund has made significant contributions to filling the data gaps that surfaced during the recent financial crisis under the so-called Group of Twenty (G-20) Data Gaps Initiative (DGI). This was in response to the G-20 Finance Ministers and Central Bank Governors Working Group on Reinforcing International Co-operation and Promoting Integrity in Financial Markets which called on the IMF and the Financial Stability Board (FSB) to explore data gaps highlighted by the crisis.1 The International Monetary and Financial Committee (IMFC) has endorsed this initiative and its progress repeatedly. Progress made so far by the IMF regarding the Data Standards Initiatives drawing on the lessons of the DGI includes: (1) adding financial soundness indicators2 (FSIs) in the SDDS on an encouraged basis, which was approved by the Fund’s Executive Board in March 20103 in response to the Executive Board’s request during the Seventh Review of the Data Standards Initiatives in December 2008;4 and (2) strengthening the data dissemination of international investment position (IIP) data under the SDDS by requiring quarterly reporting (rather than annual), with a maximum lag of one quarter (from three quarters) starting from September 2014 (beginning with data for 2014 quarters I and II), which was also approved by the Board in March 2010.

3. In March 2010, the Executive Board agreed to accelerate the timing of the Eighth Review of the Fund’s Data Standards Initiatives to within 24 months and requested an interim briefing prior to the Eighth Review within about a year. In February 2011, the Board discussed the Interim Report for the Eighth Review of the Fund’s Data Standards Initiatives and broadly supported further work on enhancements to the SDDS and on the proposal for an SDDS Plus as an additional tier of the Fund’s Data Standards Initiatives. Directors agreed that staff return with detailed proposals at the time of the Eighth Review of the Fund’s Data Standards Initiatives in 2012.

4. To further address the data gaps revealed during the global crisis, this paper highlights proposals for further enhancements to the SDDS and the establishment of a higher tier for the Data Standards Initiatives, the SDDS Plus. On enhancing the SDDS, the proposals include, among others, clarifying the timeline for the SDDS nonobservance procedure, adding hyperlinks to time series on the National Summary Data Pages (NSDPs), and incorporating two data categories on an encouraged basis. The paper proposes establishing the SDDS Plus, an additional tier of the Data Standards Initiative aimed at countries that have systemically important financial sectors. The SDDS Plus is a more rigorous tier that would require adhering countries to disseminate a broader range of data with shorter periodicity and faster timeliness. This new initiative is designed to reinforce and supplement the Fund’s Data Standards Initiatives, and not to replace the SDDS. The SDDS Plus proposal draws on the on-going work by the IMF, in collaboration with other international agencies, on the G20/IMFC Data Gaps Initiative.

5. The structure of this paper is as follows. Section II reports on developments in the Data Standards Initiatives since the Seventh Review. Section III presents proposals to strengthen the SDDS. Section IV reports on GDDS developments. Section V presents the SDDS Plus proposal, including its data categories and governance modalities. Section VI discusses the resource implications of the staff proposals. Section VII presents the issues for discussion.

II. Developments In The Data Standards Initiatives Since The Seventh Review

A. Membership

6. A large number of member countries have joined either the SDDS or the GDDS.As of December 31, 2011, about 90 percent of the Fund membership either subscribes to the SDDS or participates in the GDDS (Figure 1). SDDS subscription now stands at 69 countries while 102 countries participate in the GDDS. The GDDS has had 112 participants since its inception, ten of which have graduated to the SDDS.

Figure 1.
Figure 1.

SDDS and GDDS membership

Citation: Policy Papers 2012, 004; 10.5089/9781498340946.007.A001

7. Since the Seventh Review, five countries have subscribed to the SDDS and twelve countries began participation in the GDDS.The new SDDS subscribers are Cyprus, and the four graduates from the GDDS: Georgia, Jordan, Malta, and Macedonia, FYR. The new GDDS participants include three from the Middle East and Central Asia, three from Asia and the Pacific, three from Europe, two from the Western Hemisphere, and one from Africa.5

Figure 2.
Figure 2.

Fund Membership in the SDDS and the GDDS by Region

Citation: Policy Papers 2012, 004; 10.5089/9781498340946.007.A001

8. Currently, 19 IMF member countries are neither GDDS participants nor SDDS subscribers(Table 1). Of these, several have expressed an interest to begin GDDS participation. This is expected to take about two to five years, depending on each country’s circumstances. Most of the remaining countries are constrained by limited statistical capacity, while a few others have yet to make a strong political commitment to publicly disseminate key economic data; these factors will likely continue to limit additional membership in the short and medium term. To help address these constraints and limitations, the Japanese authorities have generously granted support in 2011 for a project to provide technical assistance to 11 of these countries to accelerate their participation in the GDDS. This project is scheduled for a formal launch at an opening workshop in March 2012.

Table 1.

IMF Member Countries Not Participating in Either the GDDS or the SDDS (as of end December 2011)

article image

All the Western Hemisphere countries participate in either the GDDS or the SDDS.

B. SDDS Developments

9. The SDDS legal text was updated to reflect the Executive Board’s decisions made at the meetings on the Seventh Review and on Broadening Financial Indicators in the SDDS and, after the approval of the Executive Board, the updated version was published in September 2010. Staff then notified the SDDS coordinators and advised them to begin implementing the recent enhancements to the SDDS (as reflected in its legal text) as soon as possible. Progress achieved thus far is described below.

Citations and Deviations from Internationally Accepted Statistical Methodologies

10. Substantial progress has been achieved regarding the change that was decided at the time of the Seventh Review of the Fund’s Data Standards Initiatives to add explicit citations to and deviations from internationally accepted statistical methodologies in the SDDS subscribers’ metadata.Staff posted on the Dissemination Standards Bulletin Board (DSBB) a list of internationally accepted statistical methodologies for each data category covered by the SDDS. In mid-2009, staff identified the cases where explicit citations of and/or deviations from the internationally accepted statistical methodologies needed to be added to the metadata posted on the DSBB. SDDS coordinators were informed accordingly in the October 2009 version of the regular monthly SDDS observance reports, with a request to make these explicit citations and note the deviations in the SDDS metadata as soon as possible. Implementation progress by subscribers in conducting this exercise is closely monitored by staff on a monthly basis. As needed, each successive monthly observance report provides reminders to the SDDS subscribers to complete the remaining gaps in the exercise.

11. Most of the SDDS metadata now have references to internationally accepted statistical methodologies and describe deviations from those methodologies. As of end-December 2011, over 96 percent of the 1242 data categories’ metadata presentations (18 data categories6 for each of the 69 subscribers) have explicit references to internationally accepted statistical methodologies that the subscriber follows, as well as relevant deviations where needed. Citations or deviations are still missing for only 48 out of the 1242 data categories, mainly regarding wages, the production index, consumer and producer prices, and population. Staff continues to work with subscribers to address the outstanding cases.

Annual Metadata Certification

12. The implementation of the Board’s decision taken at the Seventh Review to change the regular SDDS metadata certification from quarterly to annual began in 2009.Accordingly, the SDDS legal text was amended to request SDDSsubscribers to certify their metadata annually, one month after the end of the calendar year.Thus, the first annual metadata certification was for 2009, and it was due by January 31, 2010.The first results of the annual certification exercise were recorded in the subscribers’ AnnualObservance Reports for 2009, which were published on the DSBB at end-May 2010. The same exercise was completed the following year. The switch from quarterly to annual metadata certification has been accepted well and implemented successfully by all SDDS subscribers.

Modifications to the Data Template on International Reserves and Foreign Currency Liquidity

13. Implementation of the modifications to the Data Template on International Reserves and Foreign Currency Liquidity (Reserves Template) to cover exchange-traded futures settled in domestic currency has been completed. As of December 2011, all SDDS subscribers, except one,7 comply with this data dissemination requirement, which became effective at end-August 2009 (beginning with July 2009 data).

Conducting Data Quality Assessments

14. At its discussion on the Seventh Review, the Board encouraged subscribers to conduct and disseminate a Data Module of the Reports on the Observance of Standards and Codes (Data ROSC) or undertake an equivalent exercise at intervals of no more than seven-to-ten years. Staff communicated this message to all subscribers and made special efforts to contact subscribers that had never conducted a Data ROSC (or equivalent) and those where Data ROSCs were more than 10 years old. Since the Seventh Review, five Data ROSCs (Australia, Costa Rica, Korea, Mexico, and Russia) were conducted and all of them have been disseminated and another Data ROSC (Georgia) was conducted in late 2011 (see http://dsbb.imf.org/pages/dqrs/ROSCDataModule.aspx). Four subscribers have yet to conduct and disseminate a Data ROSC or equivalent exercise, and five others have outdated ROSCs (completed in 1999 or earlier). Staff has begun to update the July 2003 version of the Data Quality Assessment Framework (DQAF), used by staff to undertake the assessments under a Data ROSC, by incorporating the latest developments in statistical methodologies (especially the System of National Accounts 2008 (2008 SNA) and the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6)). The updated DQAF will be available for use in Data ROSCs in 2012. In FY 2011 and FY 2012, available resources allowed the Statistics Department (STA) to undertake up to two Data ROSCs per fiscal year but due to serious budget constraints, further streamlining is likely.8

Incorporating Financial Soundness Indicators on an encouraged basis

15. Work on incorporating FSIs in the SDDS is making good progress. The recent financial crisis highlighted the need for more frequent, timely, and cross-country comparable financial indicators. A new SDDS data category named “Financial Soundness Indicators” (FSIs) was introduced on an encouraged basis as decided by the IMF’s Executive Board in March 2010. The category encompasses seven FSIs: (i) regulatory tier 1 capital to risk-weighted assets, (ii) regulatory tier 1 capital to assets, (iii) nonperforming loans net of provisions to capital, (iv) nonperforming loans to total gross loans, (v) return on assets, (vi) liquid assets to short-term liabilities, and (vii) net open position in foreign exchange to capital. These indicators are encouraged to be disseminated quarterly with one quarter timeliness. Subscribers were informed that the seven FSIs could be disseminated through the Fund’s FSIs database (http://fsi.imf.org/), and on their NSDPs along with the already existing financial sector data categories. Subscribers that disseminate this encouraged data category have been requested to include a hyperlink on their NSDPs to the Fund’s FSIs database.

16. As of December 2011, 57 of the 69 SDDS subscribers report FSI data to the Fund. Thirty-one SDDS subscribers already disseminate FSI data through their NSDPs, either through hyperlinks to the respective country pages in the Fund’s FSI database, or directly by including FSI data in their NSDP. For these SDDS subscribers, hyperlinks have also been posted on the DSBB to the relevant country metadata contained in the FSI website. The data that are being reported may not always cover all seven indicators (while in many cases other FSIs are being reported), and may have diverse periodicity and timeliness characteristics across (and within) countries. Nevertheless, the use of hyperlinks to incorporate FSIs in the SDDS has significantly reduced reporting burdens on the SDDS subscribers and is leading to faster and broader dissemination of these data.

Dissemination on External Debt by Remaining Maturity on an encouraged basis

17. As of December 2011, only 13 of the 69 SDDS subscribers disseminate data on external debt by remaining maturity. During its discussion on broadening financial indicators in the SDDS in March 2010, the Executive Board approved the introduction of a simplified table on subscribers’ external debt by remaining maturity, on an encouraged basis, to better monitor the vulnerability of domestic economies to shocks. Four countries (Brazil, India, Israel, and Ukraine) currently disseminate external debt by remaining maturity data on web pages hyperlinked to their NSDPs. Another group of nine SDDS subscribers (Chile, Croatia, Egypt, Kazakhstan, Kyrgyz Republic, Peru, Romania, Slovak Republic, and Uruguay) disseminate these data within the Quarterly External Debt Statistics database developed and maintained by the World Bank (see supplementary Table 3.1 on gross external debt position: short-term remaining maturity by sector on the external debt hub).

Quarterly International Investment Position

18. The transition to mandatory reporting of quarterly IIP data with one quarter timeliness is on track. In order to better understand cross-border linkages and facilitate flow and stock data consistency, the Board endorsed the change of IIP dissemination requirement to quarterly (from annual) with a maximum lag of one quarter and a transition period of four years. The aim is to allow users to link the existing quarterly balance of payments data to quarterly IIP data to obtain a full picture of external vulnerabilities. The transition period is scheduled to end on September 30, 2014. At that time, all SDDS subscribers would need to disseminate quarterly IIP data on their NSDPs for the first and second quarters of 2014. As of December 2011, 47 subscribers (close to 70 percent of the 69 SDDS subscribers) already report quarterly IIP data, thereby meeting these tighter requirements. Staff has informed subscribers of the new requirement and the transition period, and consultations confirm that all remaining subscribers that do not currently conform to the new requirement are actively working to meet this schedule.

19. Staff produced and published in March 2011 a document on how to compile quarterly IIP statistics. In response to the increased number of requests for compilation advice that the IMF has been receiving from countries to meet the new demands for quarterly IIP reporting, staff produced and published a document on how to compile quarterly IIP statistics: Quarterly International Investment Position Statistics: Data Sources and Compilation Techniques. The document is currently available in English on the IMF website at http://www.imf.org/external/np/sta/iip/2011/030111.htm. Staff is available to provide technical assistance to members to support efforts to compile and disseminate quarterly IIP data.

C. GDDS Developments

20. In December 2008, during the discussion of the Seventh Review, the Board approved staff recommendations to place greater emphasis on data dissemination in the GDDS and in facilitating graduation to the SDDS. The focus of the GDDS had traditionally been more on the dissemination of metadata and, to a lesser extent, on the dissemination of data. Since the Seventh Review, staff has made additional efforts to bring the GDDS in line with the SDDS and to emphasize data dissemination by: (i) reformatting the GDDS metadata into the DQAF,9 which is the SDDS format; (ii) aligning the GDDS data categories to the SDDS; (iii) promoting annually updated national plans for improvement of the statistical systems; and (iv) developing a National Summary Data Page (NSDP) and an Advance Release Calendars (ARC) as required in the SDDS. The GDDS remains a non-monitored system.

21. Through workshops, bilateral technical assistance, and other means of communication, progress has been made in aligning the GDDS more closely with the SDDS. In close cooperation with the authorities of all the GDDS participating countries, the metadata posted on the DSBB have been reformatted into the DQAF. Moreover, seven GDDS countries now have established both NSDPs and ARCs, while a further six countries have established NSDPs, and one country adopted an ARC. Staff also has been encouraging GDDS countries to compile the statistical data categories in accordance with the requirements of the SDDS. This is expected to increase the effectiveness and efficiency of work on the GDDS, technical assistance in the area of statistics, and Data ROSC missions while facilitating the graduation to SDDS subscription. To further support the GDDS countries in implementing the changes in the GDDS, staff posted an updated GDDS Guide for Participants and Users on the DSBB.

22. The greater emphasis on data dissemination has not diverted attention from the developmental aspects of the GDDS. Since the Seventh Review, participation in the GDDS has increased from 94 to 102. Twelve countries started participation, while four countries (Georgia, Jordan, Malta, and Macedonia, FYR) graduated from GDDS participation to SDDS subscription (see paragraph 7 on membership).

Table 2.

Countries that Joined the GDDS Since the 7th Review of the Fund’s Data Standards Initiatives

article image

23. Future GDDS work will continue to pursue several key objectives.These are: (i) further increasing GDDS participation, especially in the Asia/Pacific and Middle East/Central Asia regions; (ii) encouraging GDDS participants to update their plans for improvement at least annually; (iii) encouraging GDDS participants to update their metadata on a best effort basis; (iv) assisting GDDS participants in the implementation of NSDPs and ARCs; and (v) assisting GDDS participants who want to graduate to the SDDS.

D. Outreach

24. Outreach activities were undertaken to facilitate the implementation of the decisions of the Seventh Review regarding the development of the Fund’s Data Standards Initiatives.After the Seventh Review, six GDDS and three SDDS workshops were held in eight countries; most of them were open to neighboring countries.10 The GDDS workshops allowed participants to review the modifications to the GDDS metadata. They also provided the participants with an opportunity to discuss the changes to the GDDS that were designed to strengthen data dissemination by incorporating elements of the SDDS. The workshops focused on data category alignment as well as the associated newly encouraged periodicity and timeliness for each data category, an NSDP, and an ARC. The GDDS outreach program received significant support from donors especially from the United Kingdom Department of International Development (DFID) and the Japan Administered Account for Selected IMF Activities (AASFA, formerly known as JSA) (see Box 1), which funded five of the six GDDS workshops held since the Seventh Review (see Table 3). The SDDS workshops familiarized participants with the requirements of the SDDS. They also contributed to the efforts of the participating countries to strengthen their statistical frameworks, update their plans for improvement, and improve data dissemination.

Donor Funded GDDS Projects

United Kingdom’s DFID financed GDDS project for Anglophone Africa

Strengthening the Data Framework and Dissemination Modules

One of the six GDDS workshops conducted since the Seventh Review was financed under Phase II of the DFID GDDS Project for Anglophone Africa, entitled “Modules for Strengthening Statistics” (2006-2009). DFID financed another three GDDS workshops under the “Strengthening the Data Framework and Dissemination Modules” through the Enhanced Data Dissemination Initiative (EDDI), a follow-up project launched to further improve macroeconomic statistics in 23 African countries.

These workshops contributed to the efforts of the countries to strengthen their statistical systems and improve data dissemination. Staff worked with the participants to develop NSDPs, ARCs, and plans for improvement. In this context, staff: (i) provided electronic draft NSDPs specially prepared for each of the participating countries; (ii) demonstrated the most effective way to design ARCs while emphasizing their role in enhancing data utility to the users; and (iii) urged countries to update their plans for improvement. Staff also emphasized the importance of updating metadata on a regular basis. Since the three regional GDDS workshops conducted during the first year of the project that focused on training countries to develop NSDPs, ARCs, and updating plans for improvement, five additional GDDS countries have completed and began publishing NSDPs and four additional countries have completed and began publishing ARCs. These accomplishments are both ahead of schedule with respect to the logical framework milestones for 2012.

In August 2011, Burundi began participating in the GDDS, marking a major step forward in the development of the country’s statistical system. A GDDS mission to Burundi had laid the basis for Burundi’s participation by assisting the authorities to develop their metadata and plans for improvement, following their expression of interest to join the GDDS after participation in one of the three regional workshops. The beginning of Burundi’s participation in the GDDS is in advance of the logical framework 2012 milestone.

GDDS project funded through the Japan’s AASFA—formerly referred to as JSA

In 2011, STA received external financial support from the Japan Administered Account for Selected IMF Activities (AASFA) for a project to substantially increase GDDS participation among countries in the Asia/Pacific region and targeted member countries in the Middle East/Central Asia region. The project is directed at six Pacific Island countries,1 Lao PDR and Timor Leste, as well as Iran, Turkmenistan, and Uzbekistan. The main focus of the project is to perform diagnostics of each target country’s macroeconomic statistical systems, as well as the development of plans for statistical improvements, which would be designed to serve as the basis for future statistical development. Other significant results would be the posting of metadata and links on the IMF’s website, including information on participants’ data compilation and dissemination practices, as well as the development of NSDPs and ARCs.

/1Marshall Islands, Federated States of Micronesia, Palau, Papua New Guinea, Samoa, and Tuvalu.
Table 3.

GDDS Workshops/Seminars Since the 7th Review

article image

25. During September and October 2011, five regional outreach seminars were held to get feedback from SDDS subscribers (and certain GDDS participants) on the detailed proposals regarding the future of the SDDS, as well as on the SDDS Plus.11Outreach visits were also conducted with capital markets and a number of multilateral organizations. In general terms, these proposals were initially included in the Interim Report for the Eighth Review, which was discussed by the Executive Board in February 2011. In addition, to further understand the data needs of capital markets and ensure the relevance of data standards, staff conducted similar outreach exercises with capital market players in Asia, Europe, and North America, including especially investment banks and credit rating agencies. The feedback from all of these outreach exercises has been incorporated in the proposals outlined in this Eighth Review.

26. During outreach meetings with capital market participants,12 staff discussed the proposed data categories that could be included in the SDDS Plus and possible enhancements that could be made to the SDDS. Overall, the representatives seem to be aware of recent data initiatives and strongly endorsed the enhancements to the SDDS as well as the proposed SDDS Plus data categories.

III. Proposals To Enhance The Sdds

27. The SDDS was designed to evolve over time to address new data needs and to keep its relevance to enable crisis prevention.SDDS enhancements are important to ensure that the objective of promoting transparency is maintained. The SDDS was established in the aftermath of the financial crises of the 1990’s (starting with the 1994 Mexican financial crisis), in response to the broad consensus that the lack of transparency in providing information played a role in triggering and prolonging crises. The emphasis on transparency was based on the expectation that the release of more comprehensive, frequent, and timely data together with more information on economic and financial policies would enable economic agents to take timely and informed steps that would help support sound economic policies, reducing the probability of crises. The recent global financial crisis has highlighted the need for high quality, comparable, and timely data that are crucial for early detection of risks and vulnerabilities. To assist in addressing the data gaps, the Executive Board in the Interim Report on February 28, 2011 endorsed the proposal to enhance the SDDS.

28. This chapter sets out the proposals to enhance the SDDS, based on the discussions by the Executive Board on the Interim Report. At that time, Directors stressed the need for continued close consultation with capital market participants, national authorities, and international standard-setting bodies in order to take account of country-specific circumstances and resource implications for both the Fund and member countries. Against this background, five regional seminars13 were held with 45 SDDS subscribers and 3 GDDS participants with a view to gathering feedback on possible modifications to the SDDS. Overall, participants were supportive of staff’s proposed modifications to the SDDS set out below.

A. Clarifying the SDDS Nonobservance Procedures

29. SDDS nonobservance procedures were introduced in 1996 and have evolved over time. In establishing the SDDS in 1996, the Executive Board noted that it would be necessary to signal when a subscriber was no longer fulfilling its SDDS undertakings. The Board approved the procedures of SDDS nonobservance on the occasion of the Second Review of the SDDS in December 1998 and established a graduated four-step approach for cases of nonobservance.14

30. The current SDDS nonobservance procedures do not impose a strict timeline in their implementation and allow a high degree of latitude in interpretation, which can undermine the credibility of the SDDS. Nonobservance procedures have not followed a rigorous timeline. The current legal text indicates that, in case of nonobservance of SDDS requirements, a notice could be placed on the DSBB at the same time that the matter is brought to the attention of the Governor of the Fund. The legal text does not specify how the Governor for the Fund would be notified (by letter or otherwise) and whether IMF Management or Department Directors should communicate the matter. Meanwhile, markets may come to the conclusion that a data problem exists without the Fund indicating that the subscriber is in nonobservance of its SDDS undertakings. Thus, a clearly defined timeline for nonobservance procedures would help reduce the reputational risk for the SDDS and the Fund.

Toward a Time-based SDDS Nonobservance Procedure

31. Based on the previous Board discussion and feedback from stakeholders, staff proposes a more structured timeline for SDDS nonobservance procedures (see Figure 3). These revised rules aim to clarify the maximum time lag for each step and the action to be taken by the Fund if no remedy is enacted by the subscriber.

  • Technical discussions between staff and the SDDS coordinator will start immediately after a deviation is detected. Experience indicates that most issues are resolved between staff and the authorities at this stage within a short time period.

  • If an issue that is considered serious15 and is not resolved through technical discussions within 3 months for monthly data or 6 months for quarterly and annual data, the SDDS Coordinator would be notified by staff of the initiation of the nonobservance procedures; if unresolved,

  • Communication with the subscriber’s Executive Director by staff will start within 3 months after the notification of the SDDS coordinator; if unresolved,

  • A letter to the subscriber’s Governor of the Fund will be sent, by Management, within 3 months after the communication with the Executive Director, if still unresolved,

  • A note on the DSBB will be posted within 3 months after the letter to the Governor of the Fund. The note will indicate the Fund staff’s decision that the subscriber is not in observance of its undertakings under the SDDS, and the authorities’ reactions and plans, if any, to address the nonobservance issue.

  • Board discussionwill take placeup to 12 months after posting the note on the DSBB. A Boardpaper bringing the nonobservance issue to the attention of the Executive Board will propose deleting the metadata of the subscriber from the DSBB, and effectively terminating the subscription of the country to the SDDS.

  • Re-subscription.As is the case for all non-subscribing countries, a country can re-subscribe by informing the Director of STA in writing of its intention to subscribe to the SDDS. Once staff is satisfied that the country meets all the SDDS requirements, staff will inform the country that it may proceed to inform the Secretary of the IMF of its subscription to the SDDS.

32. The trigger for this procedure is “a serious deviation” from an SDDS requirement. A “serious deviation” involves data not publicly disseminated, incomplete data publicly disseminated, or frequent delays in the public dissemination of SDDS required data. Serious deviations could also arise when other types of issues are identified but are not resolved through technical discussions within six months. Stronger requirements are applied for the timeliness of the public dissemination of the Reserves Template16 and External Debt17 categories for which the SDDS requirements do not allow any flexibility options for periodicity and/or timeliness.

33. The revised rules would limit the maximum time lags of the nonobservance procedures to 21 months, from the time of the SDDS coordinator notification to bringing the matter to the Executive Board.

Figure 3.
Figure 3.

SDDS Nonobservance Procedures Timeline

Citation: Policy Papers 2012, 004; 10.5089/9781498340946.007.A001

B. Hyperlinks to time series on NSDPs

34. It is proposed that the NSDPs should contain hyperlinks to longer time series and more detailed data via the NSDPs by end-2012.The SDDS was developed to provide users with 21 data categories, but the NSDPs were designed to contain only the two most recent observations (time “t” and “t-1”) for each variable. This lack of time series in the design of the SDDS has been a point of frustration for many users and has limited the usefulness of the data directly available from the NSDP. On the other hand, many subscribers provide longer time series in locations other than the NSDP, but users may have difficulties locating these time series. Thus, it is proposed that NSDPs should contain hyperlinks to the full set of data (providing quick access to more detailed and longer time series). The proposal for this new requirement is to provide time series for all data categories after a transition period with the related hyperlinks implemented by end-2012.

35. Most of the time series data links already have been identified by staff and have been forwarded to the authorities for their use.Since the February 2011 Board meeting on the Interim Report, staff has conducted a review of time series currently hyperlinked through the NSDPs of SDDS subscribers. For categories without a time series hyperlink from the NSDP, staff searched countries’ statistical websites for relevant time series databases. When appropriate hyperlinks were discovered, staff forwarded these hyperlinks and recommended to SDDS subscribers that these links appear on their respective NSDPs. As a result, time series data hyperlinks for more than 75 percent of SDDS data categories already appear on subscribers’ NSDPs.

C. Streamlining the SDDS

36. There are two aspects of the SDDS that are not widely applied or used: the Forward Looking Indicators (FLIs) data category and the ARC flexibility options. Modifications to strengthen the SDDS would both add and subtract encouraged data categories and simplify the structure to enhance the usefulness and operational efficiency of the standard.

Structuring Forward Looking Indicators

37. The SDDS fosters the dissemination of FLIs on an “encouraged” basis because they can provide useful insights into the developments of an economy.18 It is proposed, however, that this data category be more structured and focused. Currently only 13 subscribers19 provide data on FLIs through their NSDPs. In some instances, the dissemination of FLIs does not follow practices consistent with those for prescribed data categories, making comparison difficult. Staff, therefore, propose to add more structure and focus to this encouraged data category with particular emphasis on specific FLIs. Staff would, therefore, propose that SDDS subscribers provide on an encouraged basis FLIs covering: industrial production or investment (such as the Purchasing Managers’ Index— PMI—as a measure of business confidence), retail sales (as a measure of consumer confidence), and inflationary expectations.

Deleting ARC Flexibility options

38. The SDDS allows “flexibility for the distribution of the release dates” (ARC flexibility option) for up to two data categories.If a subscriber indicates a range of dates or a “no-later-than (NLT)” date on its ARC, but is not in a position to provide a precise release date to the IMF staff on the last working day of the week prior to the actual release of the data, it must avail itself of an ARC flexibility option. Subscribers that use NLT or a range of dates in their ARC may invoke up to two ARC flexibility options in advance.

39. The ARC flexibility option is distinct from all other SDDS flexibility options regarding periodicity and/or timeliness of a data category incorporated in the SDDS. The ARC flexibility option does not exempt the subscribing country from any other ARC requirements. It exempts the subscriber only from the obligation to provide the precise release date no later than the last working day of the week prior to the actual release of the data. However, at least 24 hours advance notice is strongly encouraged for releases of the data, even when this ARC flexibility option is taken.

40. Staff proposes to delete the ARC flexibility options from the SDDS, after a transition period, by end-2017. ARC flexibility options deprive users of an exact release date and as a result, dilute and undermine the usefulness of an ARC. Only 14 SDDS subscribers have ever invoked these ARC flexibility options, some of which no longer do so. Only ten subscribers currently use ARC flexibility options covering 13 different variables.

41. It is important to emphasize, nevertheless, that the proposal would not change any other flexibility option in the SDDS. This proposal is not related to current flexibility options on periodicity and timeliness. The SDDS will continue to allow up to two of these periodicity/timeliness flexibility options for each subscriber as it currently exists under the SDDS. The proposal also does not affect the targeted flexibility option on general government operations (GGO) for subscribers that disseminate data following the Government Finance Statistics Manual 2001(GFSM 2001) methodology.

D. Reference to International Statistical Methodologies in the SDDS Legal Text

42. Since its inception, the SDDS legal text has contained coverage descriptions or explicit references related to certain key international statistical methodologies including especially on the balance of payments.However, since the Seventh Review in December 2008, subscribers have been requested to include explicit references to internationally accepted statistical methodologies in their metadata. Simultaneously, the international statistical community has continued to develop and refine these methodologies. As a good practice, staff would plan to update the legal text to further encourage subscribers to adopt the latest methodologies in their compilation and dissemination practices.

43. It is important to note that the adoption of updated methodologies results in two types of changes in disseminated data.First, updated methodologies contain updated definitions for many key data items. (For example, gross assets and gross liabilities in the IIP are defined differently in the BPM6 than in the fifth edition of the Balance of Payments Manual (BPM5), due to changes in the treatment of direct investment.) Second, account titles often change when methodologies are updated. (For example, the terms “income” and “current transfers” in the BPM5 are renamed as “primary income” and “secondary income”, respectively, in the BPM6.) The changes in definitions and nomenclature will result in changes to data that are disseminated under the GDDS and SDDS—including data on the IIP and external debt data categories—by Fund members that adopt the updated methodologies. Data on reserves (as included in the Reserves Template) for economies in currency unions also may be affected by the adoption of the updated methodologies. Comprehensive information on changes in data dissemination arising from the adoption of updated methodologies will be presented at the same time as other changes to the legal text to the Board for approval during the second half of 2012.

E. Termination of SDDS Quarterly Update

44. Staff proposes to terminate the posting of the SDDS quarterly update on the DSBB.20The update is a report noting the observance status of SDDS requirements for all SDDS subscribers, and also providing summary information on the monitoring of the punctuality of data releases. This report was started in 2001 to chronicle the progress of the SDDS. Until 2007, when the annual observance reports for 2006 were first published, the quarterly updates were the only source of information regarding the observance of the standard. At present the annual observance reports provide more detailed and comprehensive information regarding the observance of the SDDS by each subscriber. Hence, staff proposes to terminate the preparation and posting on the DSBB of the SDDS quarterly update.

F. Encouraged Data Categories

45. Enhancements to the SDDS if the proposed SDDS Plus data categories are approved by the Board.The SDDS was designed to evolve over time to address new data needs and to keep its relevance as a tool for crisis prevention.In order to address some of the data gaps identified in the context of the G-20/IMFC Data Gaps Initiative, which includes the need for additional and timely data on sectoral balance sheets and the fiscal sector on a broader scale, staff proposes that two of the SDDS Plus data categories be included in the SDDS. Therefore, the data categories sectoral balance sheets and general government gross debt at nominal value, as discussed in paragraphs 54 and 56 respectively, are proposed to become “encouraged” data categories under the SDDS.

IV. Following Up On Enhancements To The Gdds

46. No further enhancements are proposed for the GDDS at this time. Following the major enhancements to the GDDS at the time of the Seventh Review, staff is not proposing any enhancements to the GDDS. Staff would aim to serve the broad membership by focusing on (i) further increasing GDDS participation, especially in the Asia/Pacific and Middle East/Central Asia regions; (ii) encouraging GDDS participants to update their plans for improvement at least annually; (iii) encouraging GDDS participants to update their metadata on a best effort basis; and (iv) assisting in the implementation of NSDPs and ARCs, on an encouraged basis.

47. Annually updated GDDS plans for improvement could be leveraged better. The purpose of these plans is to focus and prioritize technical assistance in statistics (from the Fund and donors). In addition, well crafted and up-to-date statistical plans for improvement could contribute to strengthening the surveillance of GDDS member countries. This could be accomplished if the issues and plans were incorporated in the Article IV staff reports, especially in the statistical issues appendix or in the main text in cases where data provision to the Fund for surveillance purposes has serious shortcomings that hamper surveillance. Staff will raise this issue at the time of the Eighth Review of Data Provision to the Fund for Surveillance Purposes scheduled for September 2012.

V. The Sdds Plus: A Proposal

48. At the time of the discussion of the Interim Report in February 2011, the Board requested staff to come back within a year with a concrete proposal for the SDDS Plus, a higher tier of the Fund’s Data Standards Initiatives. In line with the Interim Report, this section presents, for consideration by the Board, data categories that could be included in such a standard as well as proposals for governance elements and modalities of an SDDS Plus. The staff proposals reflect feedback received from SDDS subscribers, multilateral

organizations, and capital market participants in the context of the consultations requested by the Board at the time of the Interim Report.

49. The SDDS Plus would be a new tier of the Fund’s Data Standards Initiatives. The SDDS Plus goes beyond the focus of the SDDS on access to international capital markets by putting an emphasis on countries that have systemically important financial sectors. In other words, the SDDS Plus would aim to include economies that are integral to the operation of international financial markets.21 The primary focus will be on the target group22 of countries that play a leading role in international capital markets and have institutions that are interconnected through channels such as cross-border operations, interbank operations, security lending, repurchase agreements, and derivatives contracts. As identified in the Board paper on Understanding Financial Interconnectedness,23 countries have become more inter-linked with each other through asset and liability management strategies of their governments, and financial institutions and corporations, which have become increasingly global in nature. Thus, analysts need information on financial network linkages to better understand and foresee how shocks to institutions and markets can propagate through the international financial system. These developments underline the potential usefulness of an SDDS Plus. The SDDS Plus would aim to serve the broad membership by focusing on stronger data dissemination by a narrower range of target economies that would improve the data transparency, which in turn could help strengthen the international financial system.

50. Ongoing work by the IMF, in collaboration with the institutions that are part of the Inter-Agency Group on Economic and Financial Statistics (IAG)24 and with support from the FSB Secretariat, to address data gaps in the context of the G-20 Data Gaps Initiative, which was endorsed by the IMFC, has pointed the way forward for the development of the SDDS Plus. Considerable progress has been made since the beginning of the global financial crisis to identify data gaps and to develop work plans and timetables to address these gaps, as reflected in three reports presented to the G-20 Ministers of Finance and Central Bank Governors for their meetings in October 2009, May 2010, and June 2011.25

Data gaps have been identified in three main areas:

  • Build-up of risk in the financial sector (both bank and nonbank);

  • Cross-border financial linkages: investment positions and exposures; and

  • Monitoring of vulnerabilities of domestic economies to shocks.

A. Developments in the SDDS Plus proposals since the Interim Report for the Eighth Review of the Fund’s Data Standards Initiatives

51. At the request of the Board at the time of the Interim Report staff conducted a number of outreach seminars (see paragraph 25). Staff conducted five outreach seminars to discuss the proposed SDDS Plus with SDDS subscribers (and certain GDDS participants) to elicit their views. Staff also met with a number of international organizations and capital market participants to obtain their feedback. During the outreach seminars, all participants were in agreement that the data gaps as identified in the context of the G-20/IMFC Data Gaps Initiative should be addressed and overwhelmingly expressed their support for the creation of an additional tier, the SDDS Plus, as part of the Fund’s Data Standards Initiatives.

52. The data categories described below were discussed in terms of coverage, periodicity, and timeliness with SDDS subscribers and members of the G-20 that participate in the GDDS. Most of the outreach seminar participants supported the inclusion of these data categories in the proposed SDDS Plus. For summary results of the consultative process (i.e., the feedback received during these outreach seminars and subsequent teleconferences) see Annex I.

B. Proposed Data Categories—Coverage, Periodicity, and Timeliness

53. The SDDS Plus includes all SDDS prescribed data categories and nine additional proposed data categories (see Annex II). This section discusses the data category proposals for the SDDS Plus. The SDDS Plus would initially allow transition plans for up to four of the data categories through the end of 2017, if an interested country does not fully meet all the requirements, but commits to comply with them by the end of 2017.* However, in order to reflect the status of the SDDS Plus as well as the high level of interconnectedness of international financial markets, and to keep prospective monitoring of the SDDS Plus to a reasonable level, no flexibility options are being proposed, and all data categories would be limited to required coverage, timeliness, and periodicity. These data reporting requirements would be expected to evolve over time. SDDS Plus adherents would be expected to keep pace with these developments, including best statistical practices in each of these data categories. These proposed data categories refer to the four macroeconomic sectors: the real sector, the fiscal sector, the financial sector, and the external sector.

Real Sector

Sectoral Balance Sheets

54. Sectoral balance sheet data for financial assets and liabilities would constitute a critical data category for the SDDS Plus, in part because these data enhance information about the non-depository financial corporations sub-sector and the debt liabilities of the general government, as well as financial linkages across sectors. Many economies already produce and disseminate sectoral balance sheets covering financial assets and liabilities, and nonfinancial assets. However, coverage varies across economies with regard to sector details and breakdowns of nonfinancial assets and financial instruments. As countries transition to the 2008 SNA, an opportunity exists to improve and standardize the dissemination of sectoral balance sheet data. A majority of the targeted countries have work programs in place to transition to the 2008 SNA by the end of 2014, consistent with the table in Annex III. It is expected that at the beginning* countries will provide the data according to instrument on a best effort basis.

article image

Fiscal Sector

General Government Operations (GGO)

55. The GFSM 2001 methodology is well in use, with the data usually being derived by mapping national formats. Already, 96 per cent of the SDDS subscribers report GGO data in the GFSM 2001 presentational format which are published in the GFS Yearbook. The SDDS Plus proposes that countries disseminate GGO data in the GFSM 2001 presentational format (see table 4.1 Statement of Government Operations on page 38 of the GFSM 2001 http://www.imf.org/external/pubs/ft/gfs/manual/pdf/all.pdf). The SDDS Plus could also strengthen the periodicity and timeliness of GGO data, in line with the quarterly national accounts, which compile quarterly accounts for the general government sector. Moreover, consistent with other possible stock and flow data sets, the fiscal data would require financial balance sheets for the general government (as part of the sectoral balance sheets described above).

As with quarterly national accounts and balance of payments, some components of quarterly general government operations data could use different methods from those used in the corresponding annual data. Annual government financial statistics are usually more detailed and based on more reliable sources, often based on final audited accounts. In contrast, for quarterly data, particularly at the sub-national levels, there would usually be less detail, and greater use of statistical techniques such as use of partial data, sampling, and estimation. Such data may be subject to greater revisions than annual data. The Fund staff plans to release a draft guide to quarterly compilation techniques later this year to assist countries wishing to develop or improve quarterly government finance statistics.

The Executive Board endorsed a modified staff proposal extending the deadline to 12 months to address some Directors’ concerns about the quality of the data within 4 months after the reference period.

General Government Gross Debt

56. The international financial crisis in recent years, and the associated large fiscal deficits and debt levels in many countries, underscored the importance of reliable and timely statistics on general government (and, more broadly, public sector) debt as a critical element in countries’ fiscal and possibly external sustainability.It is therefore proposed that the SDDS Plus includes, as a separate category, data on general government total gross debt, at nominal value,26 classified by debt instrument, currency of denomination, and residence of the creditor. In addition, the following memorandum items are proposed:**

Total debt securities at market value (which is also in the sectoral balance sheets), and a classification by remaining maturity of general government debt securities and loans. These items are a subset of the public sector debt statistics template adopted by the Task Force on Finance Statistics (TFFS)27 and the World Bank-IMF-OECD public sector debt statistics database.28 These data include some common elements with the sectoral balance sheets and external debt.

article image

Financial sector

Other Financial Corporations (OFCs) survey

57. Data on the Other Financial Corporations (OFCs) are very important, given the role of these institutions in analyzing capital flows and assessing financial stability. These data would be included as a separate data category. In addition, the coverage of the OFCs data would follow the Monetary and Financial Statistics Manual 2000 (MFSM 2000) and its successors, as discussed below. Incorporating OFCs into the SDDS Plus would allow users to have an integrated set of monetary and financial data covering the entire financial sector.

Financial Soundness Indicators (FSIs)

58. FSIs constitute a strong data category for inclusion in the SDDS Plus.The main cluster of FSIs that would be included in the SDDS Plus proposal is six of the seven FSIs currently encouraged in the SDDS (the exception being the “net open position in foreign exchange to capital”) and, in addition, one indicator related to real estate (see Annex VI). Many economies (with global systemically important financial sectors) voluntarily disseminate six or seven of these FSIs, with at least quarterly periodicity and one quarter timeliness, excluding the net open position in foreign exchange to capital.

However, the global financial crisis also saw pressures stemming from real estate. Staff discussed during the outreach seminars four FSIs on real estate covered by the FSI concepts and definitions document (I37-I40 http://fsi.imf.org/misc/FSI%20Concepts%20and%20Definitions.pdf): residential real estate prices, commercial real estate prices, residential real estate loans to total loans, and commercial real estate loans to total loans.

Considering that many countries already disseminate data on residential real estate prices, it is proposed to expand the FSIs with a residential real estate price indicator. Although data on residential real estate prices may not be fully comparable across SDDS Plus adherents, countries will need to explain their methodology in the publicly available metadata.

article image

Debt Securities

59. The Bank for International Settlements, the European Central Bank, and the IMF have issued a Handbook on Securities Statistics to guide the compilation and dissemination of securities data, including the issuance and holding of debt (and equity) securities:

Part 1: Debt securities issues http://www.imf.org/external/np/sta/wgsd/pdf/051309.pdf; and Part 2: Debt securities holdings http://www.imf.org/external/np/sta/wgsd/pdf/090710.pdf.

In a broader context, data by issuer and holder on a from-whom-to-whom basis permit the analysis of relationships between institutional sectors and sub-sectors within an economy and also between these sectors and sub-sectors and non-residents. Such an analysis sheds light on

sectoral compositions of assets and liabilities, and on potential strengths and vulnerabilities in portfolios. As this is a new data category, it is proposed that the SDDS Plus require countries to provide data on the stocks only. Many of the targeted countries indicated that they already compile most of the required data.

article image

The Executive Board endorsed a modified staff proposal to add the sentences “Debt securities should be presented at market value, but can be presented at nominal value or both. Countries are required to indicate the valuation method in the metadata.” to address several Directors’ concerns about the availability of market values for all debt securities.

External sector

Coordinated Portfolio Investment Survey (CPIS)

60. Given the importance of monitoring cross-border interconnectedness, it is proposed that the SDDS Plus incorporates some recently established data areas. The IMF will start conducting the Coordinated Portfolio Investment Survey (CPIS) on a semi-annual periodicity beginning in June 2013 (annual data are presently collected). The purpose is to collect information on the stock of cross-border holdings of securities— equity securities and long- and short-term debt securities valued at market prices prevailing at the end of June and December, and broken down by the economy of residence of the issuer of the securities (see Notes and Definitions http://www.imf.org/external/np/sta/pi/notes.htm). In addition to this core (i.e., required) set of data, the CPIS also encourages the reporting of supplementary information. The result is a global database of reported cross-border holdings of securities and derived portfolio investment liabilities with the capacity for showing bilateral and partner economy data from the creditor or debtor perspective (http://cpis.imf.org/).

article image

Coordinated Direct Investment Survey (CDIS)

61. The IMF conducts a Coordinated Direct Investment Survey (CDIS) annually.The purpose of the CDIS is to improve the quality of overall direct investment position statistics in the IIP and by immediate counterpart economy. Data are broken down between equity and debt, and for debt further broken down between claims and liabilities.Additional breakdowns of information, showing positions between fellow enterprises separately from those with direct investors/direct investment enterprises and positions of resident financial intermediaries separately from other direct investment positions are encouraged. Countries also provide metadata. The cross-country data are stored in groups of tables showing inward direct investment (i.e., direct investment into the reporting economy), outward direct investment (i.e., direct investment abroad by the reporting economy), and metadata.

Inter- and intra-regional inward and outward direct investment were also included for the first time with the June 2011 release (http://cdis.imf.org/).

The Executive Board endorsed a modified staff proposal removing the requirement to report revised data within 15 months to address some Directors’ concerns.

Currency Composition of Foreign Exchange Reserves (COFER)

62. Participation in the Currency Composition of Foreign Exchange Reserves (COFER) database is proposed to be included in the SDDS Plus, that is, a country supplies the required data to the IMF quarterly.This proposal does not requiring public dissemination of data. Although countries would not be required to make public their information on reserves by individual currency, the proposal would mean that a country would, through its adherence to the SDDS Plus, make public its participation in the COFER database.

article image

C. Transition periods

63. Transition periods (expiring by end-2017)* would allow countries to adhere to the SDDS Plus through 2017* even though they do not meet all the requirements at the present time.Countries could adhere to the SDDS Plus if they meet all the SDDS Plus requirements. However, until end-2017* they also would be allowed to adhere if they meet these requirements for fewer than all nine data categories and apply transition periods, for up to four data categories. No transition period would extend beyond 2017.* Use of a transition period must include a description of plans to meet the SDDS Plus requirements by no later than end-2017* in the adherent’s metadata for the respective data category or categories. Thus, by end-2017,* all SDDS Plus adherents should meet the requirements for all data categories.

D. Proposed Governance Elements and Modalities of an SDDS Plus

64. Adherents.To adhere to the SDDS Plus, a country would need to be a subscriber in observance of the SDDS.Similar to the SDDS, adhering to the SDDS Plus would be voluntary, but once a country adheres, it undertakes to meet the most rigorous data dissemination and data quality standards within the Fund’s Data Standards Initiatives. While open to all SDDS subscribers, SDDS Plus will primarily target subscribers with systemically important financial sectors. As in the case of the SDDS, a country that desires to adhere to the SDDS Plus would need to inform the Director of STA in writing of its intention. Once staff is assured that the country meets all the relevant requirements, staff will inform the country authorities that it may proceed to inform the Secretary of the IMF of its adherence to the SDDS Plus and a public notice to this effect would be posted on the IMF’s DSBB. If the Board approves the SDDS Plus, the SDDS Plus legal text would be prepared and submitted to the Board for approval in the second half of 2012. Following staff visits and consultations with countries and the development of the required IT programs, countries may indicate their intention to adhere to the SDDS Plus immediately following the approval of the legal text by the Executive Board. The official launch of the SDDS Plus will take place thereafter.

65. Modalities. Modalities for monitoring the observance of SDDS Plus requirements, as well as nonobservance procedures would be similar to the SDDS. The SDDS Plus would use the NSDP and ARC mechanisms from the SDDS. However, the SDDS Plus would require that hyperlinks on NSDPs provide users with access to time series with a minimum length (five years of data for well established data categories; newly developed data categories would require hyperlinks to data since the creation of the time series). The SDDS Plus data categories would also have periodicity and timeliness requirements, as described in the previous section.

66. The SDDS Plus would contain only required data categories. The SDDS Plus would include all the existing requirements of the SDDS. All the data categories proposed for the SDDS Plus would be required and none would be categorized as “encouraged.” Modifications to the data categories in the SDDS Plus would follow the same process as the SDDS, through IMF Executive Board decision that takes place simultaneously with the normal periodic reviews of the Fund’s other Data Standards Initiatives. The associated metadata would be required for each data category under the SDDS Plus. Metadata report formats and certification would follow the same modalities as the SDDS.

E. Proposals not included

67. Staff decided to drop, for the time being, certain proposals that were included in the Interim Report for the Eighth Review of the Fund’s Data Standards Initiatives. Taking into account the views expressed by and feedback obtained during discussions with subscribers and other Fund members, international agencies, and other stakeholders, including through the outreach seminars, staff decided to drop the following proposals mainly because of the significant challenges to compile or monitor the dissemination of these data in the foreseeable future:

  • Adopting the five internationally accepted statistical methodologies (2008 SNA, CPIM 2004, GFSM 2001, MFSM 2000, and BPM 6). During the outreach seminars a number of SDDS subscribers and especially the SDDS subscribers in the initial target group expressed their reservations to the full adoption of the five internationally accepted statistical methodologies. Subscribers indicated that, since a number of these methodologies were recently revised or in the process of being updated, it would be difficult to commit to the full implementation at this stage. Staff, therefore, decided to drop this requirement from the SDDS Plus. Staff will carefully monitor countries adoption of these methodologies. In their metadata SDDS subscribers provide explicit references to the internationally accepted statistical methodologies that the subscriber follows, as well as relevant deviations from these methodologies.

  • Sectoral balance sheets—nonfinancial assets. In the feedback received from SDDS subscribers during the outreach seminars, participants informed staff that it would be very difficult and in some cases very costly to collect data on all nonfinancial assets on a sectoral basis. Staff, therefore, decided to drop nonfinancial assets from the minimal sectoral balance sheet required for SDDS Plus adherence. Staff may come back to the Board at a later stage; once more countries have implemented the full sectoral balance sheet.

  • International banking statistics as reported to the BIS. During staff’s discussions with the BIS, the latter was not supportive of staff’s proposal to include data collected by the BIS in the SDDS Plus given the challenge of monitoring SDDS Plus adherence across international agencies and the voluntary nature of the BIS exercise. STA staff continues to work closely and cooperatively with BIS staff to close important data gaps, including with regard to international banking statistics.

  • Data on systemically important global financial institutions. During consultations with other international organizations, especially the FSB, it was made clear to staff that there are still a number of issues to be addressed in terms of the detail of the information to be collected, how these information will be reported, and who will have access to the information and in what detail. Staff was informed that the FSB will finalize the decisions on the final form of the common template, the data-sharing arrangements among supervisory authorities and with the central data hub; and on broader data sharing among the official sector during 2012. The collection of data could start with phase 1 in late 2012 and, through a series of incremental steps, be fully operational by end-2014. Due to this feedback, staff decided not to proceed at this time with the inclusion of data on systemically important global financial institutions in the SDDS Plus. However, the FSB, in close consultation with the IMF, is considering the possibility of convening a small group to prepare recommendations addressing which standardized information from the template should be disclosed (or published) within one year of the launch of the common template. Given this, and the importance of data on the systemically important global financial institutions, staff would come back to the Board with a specific proposal to be included in the SDDS Plus at the latest at the time of the next review.

VI. Resource Implications

68. Staff remains cognizant of resource costs incurred by countries and the Fund.29

The enhancements to the SDDS will require additional resources, at least in the initial phase. The proposal to add hyperlinks to available time series on NSDPs for all data categories would need to be implemented by subscribers and checked by Fund staff, at least in the initial stage. However, as mentioned earlier, many countries have already added hyperlinks to available time series on their NSDPs. Also, the implementation of a required timeline for nonobservance procedures would require staff time and IT budget to develop the appropriate automated mechanisms. The proposal to remove the ARC flexibility option in the SDDS would involve minimal resource costs.

69. As part of the G-20 Data Gaps Initiative, as well as the implementation of 2008 SNA and BPM6, many countries have already incurred or are in the process of incurring much of the fixed costs that would be associated with adhering to the SDDS Plus. Countries that could potentially be interested in adhering to the SDDS Plus, including most of the G-20/IMFC economies and other countries with strong linkages to systemically important global financial institutions, acknowledge the need for greater information on financial interconnectedness and that the cost of not having the information when needed outweighs the reporting costs. However, if the reporting requirements are structured consistent with existing initiatives, to the extent possible, the cost associated with the SDDS Plus adherence should be limited. There would be no costs to members that would choose not to adhere to the SDDS Plus. Support to assist some subscribers with the implementation process would add demand for STA technical assistance. Adherence, implementation, and monitoring of a new SDDS Plus standard, in which all data categories would be prescribed, is likely to require additional financial and staff resources, especially in the initial phases.

70. It is proposed that the Ninth Review of the Data Standards Initiatives be held within five years.*

VII. Issues For Discussion

Enhancements to the SDDS

  • Do Directors agree with the implementation of a time-based SDDS nonobservance procedure (paragraph 31)?

  • Do Directors agree that NSDPs should contain hyperlinks to time series for all data categories by end-2012 (paragraph 34)?

  • Do Directors agree that the encouraged data category forward looking indicators be structured and focused to provide useful insights into the developments of an economy (paragraph 37)?

  • Do Directors agree that the flexibility option for the distribution of advance release dates be deleted from the SDDS by end-2017 (paragraph 40)?

  • Do Directors agree with the proposal to terminate the posting of the SDDS quarterly update on the DSBB (paragraph 44)?

  • Do Directors agree with the proposal to add sectoral balance sheets and general government gross debt at nominal value to the SDDS data categories on an encouraged basis (paragraph 45)?

Proposals for an SDDS Plus

  • Do Directors agree that the SDDS Plus include the nine proposed data categories as well as the related coverage, periodicity, and timeliness (paragraphs 53–62)?

  • Do Directors agree with allowing countries to apply transition periods for up to four out of the nine proposed data categories until end-2017 (paragraph 63)?*

  • Do Directors agree with the proposed governance elements and modalities of the SDDS Plus (paragraphs 64–66)?

  • Do Directors agree with the timing of the next review of the Fund’s Data Standards Initiatives (paragraph 70)?

Legal documents

  • Depending on the outcome of Executive Directors’ discussion of the above issues, amendments to the SDDS Annex (http://www.imf.org/external/pubs/ft/sd/index.asp?decision=EBM/96/36) and the new legal text for the SDDS Plus will be prepared and circulated to the Board for approval.

Eighth Review of the Fund’s Data Standard Initiatives
Author: International Monetary Fund