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Fatma Burcu Çakal

Fatma Burcu Çakal is a Central Bank Assistant Specialist at the CBRT.

Ahmet Adnan Eken

Ahmet Adnan Eken is a Deputy Executive Director at the CBRT.

Burcu Zuhal İman Er

Burcu Zuhal İman Er is a Central Bank Specialist at the CBRT.

Şeyma Serdengeçti

Şeyman Serdengeçti is an Assistant Central Bank Specialist at the CBRT.

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Developments in economic and financial systems lead to changes in information needs over time. Particularly after crisis periods, an urge is felt to change the analysis and data used in pre-crisis periods. In this framework, departing from the conviction that “risk accumulation could have been detected if the right data had been accessible at the right time”, several studies have been carried out towards detecting and remedying data gaps.

After the 2008 financial crisis, at the G20 meeting in Washington, the members decided to implement comprehensive reforms to strengthen financial markets and regulatory practices in order to prevent a possible future crisis. In 2009, the G20 Data Gaps Initiative was established with the participation of the G20 member states, and all related international organizations[1] led by the International Monetary Fund (IMF) and Financial Stability Board (FSB). There have been intensive studies on twenty recommendations set in the first phase of the initiative covering the years from 2009 till 2015. Turkey has supported this Initiative from the very beginning and has actively contributed to its work. Table 1 shows the topics in the first phase of the Data Gaps Initiative and the results of Turkey’s efforts on these topics. To summarize: while many statistics highlighted by the initiative have been developed and improved in terms of time and content, the financial accounts statistics, which provide a preliminary view of sectoral financial fragility, and the real estate prices index, which is important for monitoring possible bubbles in the housing sector, have started to be published as new statistics by the Central Bank (CBRT).

Once the member countries decided that the achievements in the first phase were satisfactory, the G20 Finance Ministers and Central Bank Governors Committee agreed that the work should move on to a second phase that will last from 2015 to 2021. In the second phase of the initiative, recommendations mainly concentrated on data sets that will be particularly used for macroeconomic policy applications and will support analyzing the risk of each sector, the internal connections among sectors, the potential contagion effects of risks, and the links in economic and financial systems. In this framework, 20 new recommendations were identified under three main headings: i) monitoring risks in the financial sector, ii) vulnerabilities, interconnections and spillovers, and (iii), communication of official statistics. Seven of these 20 recommendations were identified as common priorities (Table 2).

Turkey is actively involved in the second phase. The diversity of issues necessitates cooperation between institutions within countries. As a result of this evaluation, the Data Gaps Initiative has been included in the Official Statistics Program for 2017-2021 as a separate statistics area and the CBRT has been assigned with coordinating the studies concerning this set of statistics. Each institution[2] contributing to these statistics runs its own studies about the related recommendations. Table 3 demonstrates each country’s progress in their areas of study by October 2017[3].

In Turkey, there has been progress in priority areas coordinated portfolio investment and government finance statistics with the contribution of the earlier studies. For other priority areas, a timetable has been prepared and action plans have been drawn up for the institutions to complete the necessary improvements.

An important study carried out by the CBRT in this framework is intended to establish a comprehensive data set to monitor FX position, cash flow and derivative instrument utilization of firms in the framework of the Systemic Risk Monitoring Model. For the purpose of the study, the scope of data collected by the CBRT from real sector companies was expanded by Article 44 of the Central Bank Law no.1211 amended by Law No.7061 dated 28.11.2017. As per the model, the real sector companies directly report data on their transactions affecting their FX positions to the Central Bank. The aim of the model is to enhance effectiveness of risk management by analyzing the data at micro level and incorporating them as input in monitoring processes.

To conclude, on the back of the developments following the global financial crisis of 2008, central banks worldwide started to introduce new arrangements to compile comprehensive, high-quality and reliable sets of micro data pertaining to the changing economic conditions. In this respect, the Data Gaps Initiative has made a significant contribution to countries in collecting and disseminating comparable, consistent and timely statistics. As for Turkey, there have been significant improvements in the statistics produced within the scope of the Initiative with respect to timing and content, and new statistics, such as sectoral accounts and real estate  price indices, have started to be compiled and produced that will facilitate monitoring economic activity in Turkey. Moreover, the steps taken towards establishing a comprehensive data set intended for monitoring transactions that will potentially affect the FX position of firms is very important for detecting risks to Turkish economy at the micro level and taking the necessary measures.

[1] Other institutions contributing: United Nations Statistics Division, , Eurostat, Organization for Economic Co-operation and Development (OECD) , Bank of International Settlement (BIS), World Bank,  International Organization of Securities Commissions (IOSCO)

[2] Institutions contributing in Turkey are: CBRT, TURKSTAT, Ministry of Finance, Banking Regulation and Supervision Agency (BRSA) and Capital Markets Board (CMB).

[3] http://www.imf.org/external/np/g20/pdf/2017/092117.pdf

Şeyma Serdengeçti

Şeyman Serdengeçti is an Assistant Central Bank Specialist at the CBRT.

Fatma Burcu Çakal

Fatma Burcu Çakal is a Central Bank Assistant Specialist at the CBRT.

Burcu Zuhal İman Er

Burcu Zuhal İman Er is a Central Bank Specialist at the CBRT.

Ahmet Adnan Eken

Ahmet Adnan Eken is a Deputy Executive Director at the CBRT.

Note To Editor
For views, suggestions
and comments:
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* The views expressed here are those of the authors. They do not necessarily reflect the official views of the Central Bank of the Republic of Turkey.