Sabine Lautenschläger: Highlights of European Statistics by the ESCB -
present and future
Speech by Ms Sabine Lautenschläger, Member of the Executive Board of the European
Central Bank, at the ECB conference held for World Statistics Day 2015 under the theme
"Better data. Better lives", Frankfurt am Main, 20 October 2015.
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Introduction
Ladies and gentlemen,
It is a great pleasure to welcome you on behalf of the Executive Board of the ECB and also
personally to our conference to honour the second World Statistics Day. I am very flattered to
see that the conference has attracted distinguished participants from all parts of the world.
Welcome and be assured that your effort to come here today has not been in vain because
from what I understand you have a very interesting day lined up ahead of you.
Back in 2010, the United Nations General Assembly designated 20 October 2010 as the first
World Statistics Day, to which the ECB already contributed. More recently, the General
Assembly has decided to celebrate the second World Statistics Day on 20 October 2015. We
are excited to be hosting the second World Statistics Day with its theme of "Better data. Better
lives".
Today's conference takes stock of the economic and financial statistics produced by the
European System of Central Banks (ESCB), composed of the ECB and the national central
banks of the European Union member states. Throughout the conference you will be able to
get an idea of the richness of our statistics and to learn more about the recent enhancements
made to our statistical basis in response to new demands that resulted from the financial crisis.
You will not only receive examples of the wide range of statistics the ESCB produces to support
all central banking functions, in particular monetary and macro-prudential policies, but also
about the links between the micro and macro dimensions of statistics. In addition, there will be
a session about the efforts in disseminating these statistics to the general public. Particular
thanks go to our colleagues from the national central banks for their contributions to today's
conference. Without their invaluable contributions we would clearly not be where we are today
in terms of scope, breadth and frequency of the statistics available to the whole ESCB, the
markets and the public at large.
We are also honoured that the conference is addressed by Mr Min Zhu, Deputy Managing
Director of the International Monetary Fund, and Mr Stefan Schweinfest, Director of the
Statistics Division of the United Nations, via video link later today.
Importance of statistics for evidence-based policy making
But let me begin by putting the theme of our 2015 World Statistics Day "Better data. Better
lives" into context. Official statistics help decision-makers, since improved data sources,
sound statistical methods, new technologies and strengthened statistical systems enable more
informed and thus better decisions to be made, which should eventually result in better lives
for all of us.
How does this general theme "Better data. Better lives" apply to ESCB statistics?
The importance of having good statistics to support the conduct of monetary policy in the euro
area has been acknowledged from the start. The first President of the European Monetary
Institute, Baron Alexandre Lamfalussy, rightly stated: "Nothing is more important for monetary
policy than good statistics."1
Baron Lamfalussy also recognised that the crucial importance of statistics is not limited to them
providing a basis for decision-making, but extends to communications with market players,
economic institutions and the general public; in his words: "When monetary policy measures
cannot be justified and explained through statistical data, the measures will not be understood,
and the executing institutions will lose credibility."
And credibility, as we all know, is one of the most treasured assets of a central bank.
The ECB as a user of statistics
At the ECB, the use of statistics for our analysis and communication is pervasive. The
introductory statements of the ECB President at the press conferences following Governing
Council meetings or the ECB Economic Bulletin are cases in point and reflect how extensively
we rely on statistics.
Our "quantitative definition" of price stability is based on the Harmonised Index of Consumer
Prices (HICP) for the euro area. Our "economic analysis" is supported by a wide range of
economic and financial statistics, for example, national accounts' main aggregates, balance of
payments statistics, government finance statistics, short-term business and labour market
indicators, effective exchange rates, financial market statistics and the financial balance sheets
by sector. The "monetary analysis" focuses on money and liquidity considerations and the
statistics supporting it include, for example, the detailed consolidated balance sheet of the euro
area banks, in particular the monetary aggregates and counterparts, the balance sheet of euro
area investment funds, securities issues statistics and the financial balance sheets of the
nonfinancial sectors. Many of these European statistics are compiled by the ECB in close
cooperation with the national central banks. They are published for the benefit of the financial
markets and the public at large.
Moreover, the ECB closely monitors macroeconomic and institutional developments that pose
potential risks to financial stability. The ECB relies on macro-prudential indicators, for example
with respect to profitability, asset quality and capital adequacy data of the banking sector, and
on credit developments and competitive conditions for the financial corporations sector.
Finally, as a banking supervisor, I can assure you that supervisors rely on data for all aspects
of their daily work. Equipped with accurate supervisory data, they create risk profiles, analyse
banks' liquidity and, ultimately, assess banks' risk management via benchmarking.
The ESCB as a producer of statistics
Do I need to convince you at this stage of the importance that the ECB attaches to sound,
informative and rich statistics? Not anymore, I hope! I can assure you that without the statistics
that I have just mentioned, we would not be able to take any informed decision in any of our
main functions.
The ECB, or better, the ESCB, is not only a heavy consumer of statistics but also a producer
of statistics. Official European economic and financial statistics are produced in the European
Union by two separate pillars that work in close cooperation. One pillar is the ESCB, a system
enshrined in the Treaty. The other is the European Statistical System, a partnership comprising
the European Commission (Eurostat), national statistical institutes and other national
authorities that produce statistics at the national level. The two pillars have separate legal
frameworks and governance structures but nevertheless cooperate closely.
According to its statute, the ECB, assisted by the national central banks, collects the statistics
necessary to undertake the ESCB's tasks. The national central banks collect data not only
from banks but from all financial corporations. They also collect statistical information from
other reporting agents and sources in their respective countries, e.g. for balance of payments
statistics. To secure the quality of ESCB statistics, national central banks and the ECB conduct
quality assurance processes in conformity with the statistical principles of impartiality,
objectivity, professional independence, cost-effectiveness, statistical confidentiality,
minimisation of the reporting burden and high output reliability. These statistical principles are
reflected in the ESCB's public commitment on European statistics.
The European Statistical System produces other European statistics, such as the Harmonised
Index of Consumer Prices (HICP) or gross domestic product, population and social conditions
statistics, regional statistics, agricultural and fishery statistics, environmental statistics,
industry, transport and energy statistics, all of which are necessary to support the various
policies of the European Union.
Any successful cooperation in the area of European economic and financial statistics therefore
encompasses the national central banks and the national statistical institutes. Such
cooperation has been successfully pursued for more than two decades in the Committee on
Monetary, Financial and Balance of Payments Statistics (CMFB), which has delivered
remarkable results and built up its reputation. The CMFB's achievements include the euro area
accounts by sector, the work on pension schemes, revision policies and seasonal and working
day adjustments. Moreover, the advice of the CMFB to Eurostat on complex statistical issues
related to the Excessive Deficit Procedure has received a lot of attention in the past two
decades.
This close cooperation between the ESCB and the European Statistical System is at the heart
of the leading role that European statistics play in international statistical initiatives, such as
the G20 Data Gaps Initiative and the IMF Special Data Dissemination Standard Plus initiative,
in which seven out of the first eight adherents were EU Member States.
New demands emerging from the crisis
While the development of European economic and financial statistics by the ESCB was already
impressive before the financial crisis occurred, the ECB's functions have been expanded
during the crisis and this has led to new challenges and a remarkable development of ESCB
statistics.
More specifically, ESCB statistics had to respond to three main challenges: (i) From 2008,
the monetary policy of the euro area had to be conducted during turbulent times and new data
needs emerged for monitoring often unconventional policy measures and mitigating systemic
risks. (ii) In addition to its primary function of maintaining price stability, the ECB had to focus
more on financial stability and it received a mandate to support the statistical needs of the
European Systemic Risk Board (ESRB). (iii) Finally, the ECB became responsible for banking
supervision on 4 November 2014 and, as a result, the statistics departments of the central
banks have yet another partner to serve.
One of the most important challenges arising from the financial crisis has been the dramatic
increase in the need for very timely, granular data. Starting with the crisis, aggregated data
became less representative on their own and did not suffice to reveal the whole story. The
same aggregated statistics can be the result of different underlying situations and the risks of
having only truncated information sets available for decision-making are huge, as the case of
Lehman Brothers showed us. Hence, ever since the crisis set in, national data or data at a
more granular level have received increased attention compared with euro area aggregates.
The response of the ESCB statistical function
So, how did the ESCB statistical function address these challenges? The response has been
organised through the following five lines of action, as my colleagues will explain to you in
more detail later today:
Firstly, since the beginning of the crisis the ESCB has enriched several datasets in order to
close the most urgent gaps within monetary and financial statistics. Here, I refer to statistics
on MFI balance sheet items, bank interest rates, investment funds, insurance corporations,
loan securitisation by banks and the activities of securitisation vehicles as well as the
forthcoming money market statistical reporting.
Secondly, the ESCB has since 2009 been preparing the compilation of balance of payments
statistics and sector accounts including financial accounts in line with the latest international
statistical standards and has also been publishing the results since the fourth quarter of 2014.
Thirdly, the ECB has been collecting, in addition to security-by-security data on issuances,
information on holdings in recent years. Securities holdings represent a field where exposures
are often concentrated and a lack of sufficiently comprehensive, consistent and granular
information has been identified. The aim of developing a detailed dataset on securities holdings
is to combine large concentrated holdings in the euro area with information on the individual
issuers across the world, as contained in the Centralised Securities Database.
Fourthly, the efforts that have been made to collect more granular data from banks and other
agents take into account the reporting burden. The idea is that granular data are stepwise only
reported once and are used for several purposes. The reporting burden on the reporting agents
is thereby reduced, saving resources and costs. Timely granular data are also key to
addressing in a smooth and effective manner ever-changing user needs, and also to reducing
the need for costly ad hoc data requests. In any case, all data collections by the ESCB are
subject to a prior, strict merits-and-costs procedure in order to minimise the reporting burden,
subject to statistical needs.
Fifthly, innovative data dissemination tools have recently been developed to make the ESCB
statistics available through multiple and user-friendly channels.
Looking forward
Over the coming years, priority will continue to be given to enhancing the completeness,
geographical coverage, quality and timeliness of European statistics by the ESCB and to
reconcile and - potentially - even integrate the statistical information collected for monetary
policy and financial stability purposes with what was until now the rather separate world of
supervisory information. Further granular data on securities statistics, issues and holdings are
prominent examples. Similarly, granular data on credit claims are needed.
The Analytical Credit Dataset (AnaCredit) is an example of an endeavour where the experience
gained in the wake of the recent financial crisis is helping. The future datasets will serve many
different central banking purposes - monetary policy conduct and operation, research,
financial stability and macro-prudential policy or risk management. While AnaCredit's data
content may also support supervisory functions, the initiative was launched prior to the
establishment of the Single Supervisory Mechanism in 2011 and further work has started on
addressing more specific supervisory data needs, and the related appropriate legal basis. For
now, however, this project does not include any specific supervisory requirements. These will
only be added at a later stage, and only if endorsed by the ECB's decision-making bodies and
after close consultations with the main stakeholders.
AnaCredit will make it possible to carry out analysis which cannot be carried out with the
aggregate statistics currently available. To give you some examples on the expected use,
• it will provide detailed quantitative information on firms' access to credit as well as
credit supply constraints, especially for SMEs (current information is qualitative, only
available via surveys);
• more comparable information across countries will become available on the
breakdown of the lending granted by credit institutions by sector of economic activity,
size of firms, geographic allocation, type of instrument, maturity, etc.;
• a more accurate analysis of credit risks, and their potential build-up into systemic risks
in the financial sector, will be released on financial institutions' exposures to various
economic segments or (cross-border) counterparties;
• the calibration of macro-prudential policies - based on, e.g., counter-cyclical capital
buffers - may also greatly benefit from AnaCredit;
• similarly, aggregating all exposures of banks to a given borrower, which are often
located in different jurisdictions, will provide a meaningful picture of the debt
sustainability of this borrower and, hence, of risks borne by its creditors.
Given the complexity arising from the granularity and the expected large volumes, the search
for the right balance between data needs and reporting burden is particularly challenging.
Therefore, the project will be implemented step-by-step, to allow a smooth implementation for
both participating central banks and reporting agents. The first stage of AnaCredit will be
dedicated to granular information on loans granted by credit institutions to non-financial
corporations and other legal entities, only. Loans to natural persons (housing loans to
households and loans to "sole proprietors", e.g. doctors or lawyers) are to be included at a
later stage, which is likely to be beyond 2020, the launch of which still needs to be decided
upon by the Governing Council.
In any case, data confidentiality protection will be fully ensured, in accordance with applicable
national and European legal frameworks.
The ECB is well aware that collecting more detailed data to close information gaps requires
significant efforts by all parties involved. It is the key statistical trade-off we are faced with: the
one existing between statistical information and reporting burden. We fully understand that
banks are in the business of banking and not statistical reporting. However, given their key role
within the monetary and financial system, banks have to provide relevant information and they
will greatly benefit from good monetary and other policies as well as information returns.
Concluding remarks
Ladies and gentlemen, allow me to conclude.
Credible statistics lie at the heart of the ECB's policy-making. My intention today has been to
provide you with highlights on the richness of the statistics produced by the ESCB and on the
effort that statisticians at the ESCB have put in when responding to the new demands of
monetary, macro-prudential and now also micro-prudential policy-makers in recent years.
The recent financial crisis has increased uncertainty and we need more detailed and globally
comparable statistics. We must invest in closing gaps, mainly by complementing aggregated
statistics with more granular data and in enhancing the comparability of statistics at the global
level by applying the agreed international statistical standards. Only in this way can we attempt
to achieve more informed decision-making by policy-makers, thereby fulfilling today's general
theme, namely "Better data. Better lives". This is the key message I would like you to take
away today from this World Statistics Day 2015 celebrated by the ECB.