Duncan’s Economic Blog

Bank of England to reform monetary data

Posted in Uncategorized by duncanseconomicblog on May 26, 2009

I wrote a long post on money and credit about a month ago.

One point I noted was:

Basically the growth of the shadow banking system and the use of Special Purpose Vehicles (SPVs) in securitisations has potentially ‘broken’ the monetary data. Simply put there are now lots of quasi-banks which are not technically banks and so not treated as banks in the official data. Their holdings of money are included in the monetary data and have the effect of inflating the numbers – even when it will have no effect on economic activity in the traditional sense.

Excellent news out of the BOE. They are moving to reform the data to ‘fix’ this problem.

In order to improve the quality of the monthly measures
of underlying money and credit, the Bank will collect an
industrial breakdown of deposits and lending data at a
monthly frequency from July onwards. A monthly
version of M4 and M4 lending excluding intermediate
OFCs – covering data for the month of July – will then
be published for the first time on 1 September 2009, in an
additional table in the Sectoral breakdown of aggregate
M4 and M4 lending.

The whole article from the Bank is well worth a read.


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