G20 Data Gaps Initative
April 23 2015
Robert Heath (International Monetary Fund)
Pietro Franchini (Financial Stability Board)
Professor Charles Goodhart (LSE)
Dr Chris Clack (UCL)
- Primer - G20 Data Gaps Initiative
Yawn yawn… boring, boring. At least, that’s what many people feel about statistics – and a fortiori about economic and financial statistics. But, if you cannot measure something – or if you don’t really believe the numbers you have – it is awfully hard to develop a policy response. And in an increasingly interconnected and interdependent world, in which finance is the glue that holds things together, issues of data availability and comparability can be absolutely crucial.
That was something policymakers learned during the 2007-08 crisis, and the result was that, in April 2009, the G20 tasked the IMF and FSB with developing what has become known (perhaps infelicitously) as the Data Gaps Initiative. A great deal of work has been undertaken by the DGI over the past five years, based on 20 recommendations for better data (and data gathering) in four interconnected areas:
- the build-up of risk in the financial sector;
- cross-border financial linkages;
- the vulnerability of domestic economies to shocks; and
- the communication of official statistics.
It may sound dry-as-dust, but an initiative like this is crucial if we are to head off financial crises – and if we are to respond more effectively when crises eventually break upon us (as they will). And, in any case, this particular initiative is going to percolate right through the financial services sector, affecting all our lives.
I am, therefore, delighted that two of the main players in the DGI (who are over in the UK for an important meeting with EU and country officials, where they will be discussing priorities for the next five years) have agreed to explain what they are up to, and what they hope to achieve:
- Robert Heath is a deputy director in the IMF’s Statistics Department, overseeing development of methodological standards. Before joining the Fund, he worked at the BofE and the Treasury.
- Pietro Franchini is a member of the FSB’s Secretariat, and was formerly director in the Financial Supervision and Regulation Directorate at the Banca d’Italia.
I am also delighted that we have prevailed on two leading academics to kick off what I am sure will be a lively discussion:
- Charles Goodhart is Professor Emeritus at LSE, where he co-founded the Financial Markets Group (of which he is still a member). Before joining the LSE faculty in 1985, he spent 17 years at the BofE, where he was appointed Chief Adviser in 1980. From 1997 to 2000, he was one of the outside members of the Bank’s new MPC.
- Christopher Clack is the founder of the Financial Computing MSc Programme at UCL, which he directed from 2007 to 2012. He also founded the Thomson-Reuters Lab at UCL, the UCL Financial Stability Research Forum and the Financial Services Knowledge Transfer Network.
The DGI is clearly an important exercise that will have a big impact on how we handle the threat of financial crises going forward.