Thursday, April 18, 2013
Author: David Schwartz J.D. CPA David Schwartz J.D. CPA
Every financial crisis brings in its wake demands for more information; the latest one is no exception. Because, in deceptively tranquil times, it is well-nigh impossible to foster the consensus necessary to improve data availability, such a window of opportunity must not be missed. To be sure, the main reason why crises occur is not lack of statistics but the failure to interpret them correctly and to take remedial action. But better statistics can no doubt be a big help. Priorities for new data collections include better property prices and, above all, comprehensive financial information for banks on a consolidated and global basis, covering their balance sheets but also their income statements. This could be usefully complemented with corresponding information on the international geography of these banks’ operations and, for crisis management purposes, with much more timely and granular data on their bilateral exposures. The collection of information should be based on sound governance arrangements, flexible and cost-efficient. The BIS can play and is playing a very active role.
. . . in our internet age, we are constantly bombarded with data, and yet we do not have at our fingertips the information to answer even basic questions about the health of our financial system. Either this information does not exist or, if it does, it is not collected in a way that makes it easily available and digestible.