Improving the database for financial markets in emerging market economies and developing countries
“Properly functioning bond markets in emerging market economies and developing countries make a valuable contribution to greater growth and stability in these countries, regionally and globally.” This message was underlined by Jörg Asmussen, Director General, Financial Market Policy at the Federal Ministry of Finance, and Hermann Remsperger, responsible for international relations and statistics on the Bundesbank’s Executive Board, at an international conference on “Bond Markets in Emerging Market Economies and Developing Countries – Financial Globalisation, Vulnerabilities and Data Needs” in Frankfurt.
The aim of the conference, which was organised jointly by the Deutsche Bundesbank and the Federal Ministry of Finance, is to implement the G8 action plan for developing local bond markets in emerging market economies and developing countries with a view to promoting stability and growth and reducing the likelihood of crises. The action plan was a focal point of the German G8 presidency in 2007.
“Unfortunately, comparable, high-quality aggregated data on bond markets are still scarce in these countries”, emphasised Mr Asmussen, underlining that the conference should provide further impetus for improving the data situation in these markets.
Mr Remsperger stressed that, “Dynamic structural change on international financial markets is having a knock-on effect on the market structure and on the way local bond markets in emerging market economies and developing countries are reacting.” In order to assess this development and, in particular, its consequences for financial stability on an up-to-date and reliable basis, the database must be broadened.
Mr Remsperger continued to note that database improvement should have two primary objectives. First, data gaps must be plugged more quickly. This, he claims, will require more in-depth discussion between experts on financial stability and statistics throughout the world. The central banks’ involvement in this process will be crucial. Second, all relevant groups of countries should have a standardised data framework. Internationally comparable statistics are growing in importance.
He believes that the objectives could be achieved by setting up a securities database containing all of the information required for analytical purposes on each individual security. The European System of Central Banks (ESCB) has already started establishing such a securities database (Centralised Securities Database). To this end, it is phasing out, over several years, the aggregated method of collecting securities statistics and increasingly replacing it with “security-by-security systems”.
The conference was attended by experts on financial stability and statistics from the Bank for International Settlements (BIS), the International Monetary Fund (IMF), the World Bank, the Organisation for Economic Cooperation and Development (OECD) and representatives of the central banks and ministries of finance of the G8 countries, emerging market economies and developing countries, as well as private sector experts.