parti: objectives and features of the new reporting system 159 - TARA

This may be a rare occurrence but it can happen The role of the Central Bank as
regulatory authority charged with ensuring the solvency of individual banks should
be separate from the role of policy maker and data gatherer
If one takes the view, as I do, that the purpose of collecting statistics is wider than
informing the Central Bank as to the status of money and credit markets, then some
of the conceptual issues raised by Mr McEvoy are of little relevance whereas
others, little discussed by him, are important. I will return to these issues m a
moment
Before that, however, I should like to discuss the second, but related, question which
Mr. McEvoy's paper provokes. This is: who are the users of money and banking
statistics? The paper lists five categories of user needs. The first three refer mainly
to Central Bank (and possibly academic) users, the fourth to international reporting
obligations and the fifth to both official and private sector users
If the order set out by Mr. McEvoy is any indication, it is clear that a low priority is
given to those seeking information about domestic financial markets m order to
evaluate pressures on such markets and the public and private responses to such
pressures Not surprisingly this is the perception of those of us who are non-official
users of data
The introduction of new banking statistics has increased the amount of information
on the Irish banking system, especially on the split between Irish pound and foreign
currency assets and liabilities. It has, by changing certain definitions of residency,
thrown the whole calculation of the balance of payments into doubt. It appears to
have provoked the CSO into a major re-examination of its methodology for
calculating both capital outflows and factor payment flows.
In making the change, however, the Bank has affected the development of
consistent series of monetary aggregates. By and large, we will have to wait some
years before sufficient data are available on the new basis to perform reliable
econometric work. That is a pity although it is a comment more on past data
collection than on present.
The consideration in Mr. McEvoy's paper on the measurement of bank credit is, I
think, a good guide to the interests of the target user of the new statistics - the
Central Bank. Most of the methodological refinements discussed - including
allowances for accrual, capitalized future interest, bad debts and transit items - are
of interest because they affect the measurement of private credit and affect the
ability of the Central Bank to control such credit aggregates.
If banking statistics were viewed as market information for all entitities in the
financial sector, there would be less concern over the precise measurement of the
credit aggregate and more concern over other banking data, including data not yet
provided.
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