of the strong shortcomings of the ATM indicator, which has a very limited policy component and is dependent on both financial development and technology.

- As regards _non-bank financial institutions_ , a substantial effort will be needed to put together a more comprehensive data set. For institutional investors, information on asset size is still quite dispersed and incomplete; on efficiency (for example fees) and reach (number of customers), it is essentially non-existent. On other non-bank financial institutions (factoring and leasing companies, finance companies, coops, housing finance, etc...), there is even less. Yet, some of these activities (for example factoring and leasing) can play a key role in helping promote intermediation in environments with imperfect informational or contractual frameworks.<sup>42</sup>

- Information on _bond markets_ , another key component of financial development, is also severely deficient. While cross-country information on bond market size (public and private) has improved, mostly thanks to BIS efforts, country coverage remains limited. Information on secondary markets’ efficiency and liquidity (for example bid-ask spreads by transaction size) is even more deficient. Nor is there sufficient standardized information to assess the completeness and scope of the public bonds yield curve. Last but not least, current information does not break down private bonds by origin, corporate or housing. In this context, the lack of information on asset-backed securities is another key shortcoming which prevents assessing the growth of the securitization and structured products industry.

- The lack of information on _risk-based instruments_ (except for insurance products on which the Swiss-Re database provides a wealth of information) is a final major gap in the existing financial information. In particular, there is very little information on derivative markets, a key component of financial development in middle-income countries.

- Last but certainly not least, in view of the ever more important impact of financial globalization, it is also crucial to incorporate information on financial transactions that originate _offshore_ . This applies of course to banking but also, and increasingly so, to bond and equity markets. In many countries, the welfare impact of small domestic financial systems is offset by large offshore transactions. While much progress has already been made, mainly by BIS, in gathering information on offshore holdings by (and liabilities from) non-residents, more efforts are needed to collect this type of information, particularly as regards equity markets (ADRs and the like).

> 42 The Fund’s ongoing efforts to expand IFS data to include non-bank institutions could play a key role in this respect, provided it becomes available soon enough and can be broken down by sectors and functions. As the same activities can be developed by different institutions, the data should ideally be collected in a way that can be sorted out by functions (for example, factoring products offered by general purpose banks would need to be added to those offered by specialized institutions). Data on fees (particularly for mutual and pension funds) would also be highly desirable.

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