Vítor Constâncio: How fit are statistics for use in macro-prudential oversight? Speech by Mr Vítor Constâncio, Vice-President of the European Central Bank, at the Sixth ECB Statistics Conference, Frankfurt am Main, 17 April 2012. * 1. *  *  Introduction  Macro-prudential analysis and oversight are not new tasks for central banks. In broad terms, the objective of macro-prudential analysis and oversight is to identify and prevent systemic risk, so as to minimise the costs that financial instability can impose on the real economy. Pursuing this objective calls for the definition of qualitative and quantitative intermediate goals, which can pose considerable analytical and informational challenges. Over the past few years, the financial crisis has clearly illustrated just how devastating the materialisation of systemic risk can be for the financial sector and the broader economy. In particular, the financial crisis has demonstrated the need for a coherent and well-articulated macro-prudential policy framework at the national, European and global level. In this respect, it exposed deficiencies in the information base on which macro-prudential oversight was being conducted. It is on this latter topic that I will focus my presentation today. In assessing the question as to how fit statistics are for use in macro-prudential oversight, I will outline the data needed for macro-prudential analysis, touching upon the ECB’s responsibilities in the field of macro-prudential oversight. I will then move on to reflect on what has been achieved so far, paying particular attention to the macro and microdimensions of data requirements.

The new global landscape of growing cross-border financial flows between regions that have national and cultural differences also underscores the need for enhanced recognition and understanding of practices in the different jurisdictions. This imperative translates into high demands on the use of standardised documents and agreements among Shariah compliant financial market players. Standardised documents and agreements increase market efficiency, transparency and uniformity, as well as reduce the cost of transactions as we strive towards seamless global interlinkages. The fourth prerequisite is the catalytic role of Shariah scholars in expanding cross-border Islamic financial transactions. Given the prominence of Shariah in the industry’s advancement, greater internationalisation will require the capacity and capability of Shariah scholars in offering practical solutions to Shariah issues faced by various global participants. Equally important is the efficiency and agility of Shariah scholars in responding to these matters. This calls for continuous discussions and active dialogues involving scholars across the globe. Of importance is also the need for mutual respect and common understanding within the international Shariah fraternity to enable productive and effective deliberations that will facilitate cross-border businesses. Many can indeed benefit from learning and leveraging on these country reports. To better disseminate the information, an idea is for the IDB Regional Office here in Kuala Lumpur to act as a focal point for member countries seeking further information or clarification on the reports. As a measure to further develop Islamic finance, the Regional Office can also expand its scope to include capacity building programmes for member countries.