Let us assume that demand in the economy has fallen, and that a need for more expansionary policy has therefore arisen to stabilise the real economy and inflation. The central bank then wants to cut the policy rate so that it is on the red curve. 9  Capital requirement here refers to the statutory capital adequacy requirement. BIS central bankers’ speeches  11  But at this low interest rate the financial supervisory authority may worry that risks are beginning to build up and it will therefore raise the capital requirement. However, the higher capital requirement not only means that the risks decline, it also has some negative effect on demand in the economy. This has the consequence that the central bank wishes to cut the policy rate further, which in turn makes the financial supervisory authority want to raise the capital requirement, and so on, and so on. This leads to a “race”, which ultimately leads to the capital requirement reaching its upper limit at the same time as the interest rate is extremely low. It is easy to imagine that this final mix of the two policy instruments is not optimal from the perspective of the economy as a whole. The means of control for monetary policy and risk have been used much more aggressively than is beneficial for the economy and also more aggressively than either the central bank or the financial supervisory authority would wish. Of course, one can discuss how realistic this particular example is.
As emphasized by the Director of the State Statistical Office, Mr. Apostol Simovski, the Republic of Macedonia has long been integrated into the system of the so-called IMF’s Data Standards Initiatives. This system is extremely dynamic and started to develop since the mid-1990s, in response to the then international financial crisis, in order to promote transparency of both economic and financial data. I say dynamic, given that its construction blocks have been continuously changing and increasing. Its last, third construction block is the SDDS plus which reflects the weaknesses identified in the statistical data infrastructure that surfaced with the latest global economic and financial crisis from 2008. It is a fact that the genesis of the crisis was not located in the lack of data, but fact is also the identified need for an enriched data set for conducting more effective economic policies. This crisis has clearly shown how inadequate regulation and excessive risk-taking can lead to a collapse of the financial system. It has shown how the underestimation of the strength of the links of the financial system with the real sector, as well as the underestimation of cross-border exposures of economies and financial integration, could lead to inadequate assessment of macro-financial links and underestimation of risks. The SDDS plus is actually a response of the international financial community to these statistical gaps. This initiative means enrichment of statistics, in both scope and quality, in order to timely recognize and appropriately react to vulnerabilities that may arise in an economy.