To access FSI data and metadata reported on a regular basis by member countries go to Regular FSI Reporting (Data & Metadata)

Background to the Coordinated Compilation Exercise

The IMF Executive Board has consistently underscored the importance of FSIs in addressing financial sector soundness, facilitating financial sector surveillance, increasing the transparency and stability of the international financial system, and strengthening market discipline.¹

The core and encouraged FSIs developed by the IMF, in consultation with the international community, are aimed at monitoring the current financial soundness of entire sectors of financial institutions, and of the corporate and household sectors, which are their counterparts. FSIs have also been developed for the markets in which the financial institutions operate. The new methodology for the compilation of FSIs is contained in the IMF's Financial Soundness Indicators: Compilation Guide (Guide).² In its review of the FSI work program in June 2003, the IMF Executive Board saw the Guide as a milestone in establishing a standard reference in the compilation of cross-country comparable FSIs.

It is important to note that the Guide recognizes upfront (Chapter 1, paragraph 24) that FSIs are only one input into macroprudential analysis. Also relevant are (1) indicators that provide a broader picture of economic and financial circumstances, such as asset prices, credit growth, GDP growth (including its components), inflation, and the external position; (2) the institutional and regulatory framework for an economy, in particular through assessments of compliance with international financial sector standards; (3) the outcome of stress tests; and (4) the structure of the financial system and strength of the financial infrastructure.

The work program on FSIs endorsed by the IMF Executive Board in its June 2, 2003 meeting on FSIs included assessing countries' capacity to compile FSIs and helping them develop that capacity, through the conduct of the CCE for FSIs, the Financial Sector Assessment Program (FSAP), Article IV and Use-of-Fund-Resources (UFR) missions, workshops and technical assistance. At that time, IMF Executive Directors generally supported the further development of guidance on the use of FSIs and their expanded reporting and analysis in bilateral and multilateral surveillance, including Article IV reports and the Global Financial Stability Report. Directors also encouraged work on the use of FSIs and stress testing as well as analytical work to clarify macro-financial linkages and identify data needed to assess them.

Goals and conduct of the CCE

In the June 2, 2003 meeting of the Executive Board of the IMF, nearly all Directors supported the proposal for the Fund to conduct, with the assistance of other international agencies, a coordinated compilation exercise (involving the participation of about 60 countries representing a balance in country representation selected on transparent criteria) for supervisors and statisticians after finalization of the Guide. In March 2004, the IMF launched the CCE with a view to (1) developing the capacity of the member countries to compile FSIs important to the surveillance of their financial systems, (2) promoting cross-country comparability of FSIs, (3) coordinating efforts by national authorities to compile FSIs, and (4) disseminating the FSI data compiled in the CCE, along with metadata, to increase transparency and strengthen market discipline. To advance the implementation of the CCE, a meeting for the participating countries³ was held in November 2004 at IMF headquarters. Following that meeting, the CCE terms of reference, the CCE work program, and the standard CCE report forms for FSI data and metadata developed by the IMF Statistics Department were finalized.

The CCE-as a pilot exercise-only envisaged collection of data at a point in time (end-2005). The decision on whether the IMF should collect and disseminate FSI data on a regular basis was left to be made by the IMF Executive Board after the evaluation of the outcome of the CCE (see below).

In accordance with the terms of reference of the CCE, the 62 participating countries were to compile at least the 12 core FSIs as of the end-2005 reference date and provide the IMF using the standard report forms on the core FSI data and the underlying data series, along with detailed metadata. Countries were also encouraged to compile and submit data and metadata for any of 28 encouraged FSIs for the same point in time. It was agreed that all the FSI Data & Metadata provided to the IMF would be disseminated to the public through this IMF website.⁴ Participating countries were encouraged to follow the Guide's recommendations to the extent possible to foster comparability of data across countries. As there were bound to be deviations between a country's compilation methodology and the Guide, as well as among different countries' compilation practices, the production of detailed metadata was seen as essential to, among other things, avoid inappropriate comparisons of differently constructed data. In this context, users of FSI data compiled for the CCE are urged to also look carefully at the provided metadata before engaging in comparisons of different economies' FSIs.

To support the compilation of FSIs by the CCE participating countries, the IMF Statistics Department staff provided technical assistance by conducting meetings and by providing advice from IMF headquarters. Four regional meetings were organized during May-July 2005 and another four in April-July 2006 (in Vienna, Frankfurt, Singapore, and Brasilia). The meetings were attended by representatives from the countries participating in the CCE and by observers from international and regional agencies. They provided opportunities to discuss the methodology of the Guide, consult with countries on their FSI compilation issues, and assist the countries in advancing their work on the submission of FSI data and metadata to the IMF in the context of the CCE. The CCE participating countries remain responsible for the content and accuracy of the FSI data and metadata provided to the IMF and disseminated in this website.

To ensure that there is appropriate coordination among various international and regional agencies in FSI compilation efforts, a Reference Group comprising these agencies was established for the CCE. In November 2004 and December 2005, meetings of the CCE Reference Group were held at IMF headquarters.

In June 2005, the IMF Executive Board was informed about the progress of the FSI work program, including the CCE, through an Executive Board paper.

Assessment of the CCE and the way forward

On May 29, 2007, a meeting of the CCE Reference Group was held at IMF headquarters to inform the various institutions on the CCE and discuss these institutions' views on the way forward with FSIs. Moreover, a post-exercise meeting of CCE countries was convened during May 30–31, 2007 at IMF headquarters, in which members of the CCE Reference Group also participated. The meeting was aimed at drawing conclusions from the CCE and provided a forum for participating countries and collaborating regional and international institutions to exchange views on the CCE, FSIs and their methodology, and the way forward regarding the compilation and reporting of FSIs. The meeting concluded that the CCE was very useful and relevant to the participating countries' financial stability work, promoting compilation and dissemination of data, as well as a broader awareness of FSIs among country authorities. Moreover, participants in the meetings felt that the CCE fostered a clearer understanding of the FSI compilation methodology and the critical issues involved, making transparent (through the metadata) the mode of compilation of FSIs across countries. Participants in the meetings were strongly supportive of continuing the IMF's involvement in FSI work.

On November 7, 2007, the IMF Executive Board reviewed the experience with the work program on FSIs and discussed proposals for taking forward the work on FSIs. The Executive Board discussion was based on a paper entitled "Financial Soundness Indicators: Experience with the Coordinated Compilation Exercise and Next Steps," and on supporting information provided in a background paper. These papers also reported on the views of CCE participating countries and collaborating institutions. The Executive Board commended the IMF's work on the conduct of the CCE. Directors noted that the CCE had helped strengthen the FSI compilation capacities of the participating countries, and had provided useful support for their work on financial stability issues. Directors noted that the CCE, as a pilot undertaking, had yielded valuable lessons for FSI methodology,⁵ and for guiding the IMF's work in this area more generally. Directors also felt that the CCE had proved helpful in fostering convergence in compilation methodology over the medium term by introducing transparency through the metadata that accompanied the FSI data. The Executive Board supported regular collection and dissemination of FSIs by the IMF, with the creation of a centralized public FSI database that would be available to member countries, international institutions, and markets. The conclusions of the November 2007 Executive Board meeting are summarized in the Public Information Notice No. 07/135 of November 20, 2007.

On July 31st 2009, a first batch of member countries initiated regular reporting and dissemination of FSI data and detailed metadata through the IMF's website. The IMF will aim over time to add to the list of reporting member countires.

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