The data doesn’t lie
The past few weeks have been chaotic in global financial markets, including a run on Silicon Valley Bank, quickly followed up with a wave of
panic uncertainty around Credit Suisse, with both deposit-taking institutions subject to rapid regulatory resolution over the past couple of weekends. There will be much to unpick about both of these high profile bailouts resolutions, but one thing is clear: the data doesn’t lie.
Thanks to digital reporting mandates, there is a wealth of machine-readable data on major banks worldwide – indispensable in helping markets, and regulators, to make decisions. There are numerous articles looking into a range of institutions, many drawn from the XBRL-based financial statements filed in the United States, including blogs from our friends at Calcbench.
We did a little experiment of our own on some other US data. The FFIEC through the FDIC has been collecting and republishing bank “call report” data in XBRL format about US banks since the mid-naughties. Its Central Data Repository is a treasure trove of public information. Want to understand the maturity profile of the bond assets that SVB held at the end of 2022? It’s right there (select “Call Report” and type the name of the bank)… scroll down to Schedule RC. Even better, it’s possible to download these filings in XBRL format.
That means that with a minimum of fuss, it’s possible to identify the asset and liability matching arrangements for any number of banks. Before anyone rushes off to go and short some banks, you’ll have to dig a little deeper to understand how each bank hedges its interest rate risks, although that data, too, is in the call reports
Data alone cannot prevent a banking crisis, but it can play a critical role in helping regulators to monitor and mitigate risks, improve transparency and accountability, and ultimately promote a more stable and resilient financial system. And yes… we appreciate that there will be questions about the way that different regulators used the data. Read more…. in just about any newspaper, anywhere in the world!