The Benefits of Higher Capital Requirements  The assumptions underpinning the marginal benefits of higher capital in the LEI study were as follows: banking crises occur, on average, once every 20-25 years; the median estimate of the cumulative discounted costs of a crisis is around 60% of annual pre-crisis GDP; each percentage point increase in the capital ratio reduces the probability of a banking crisis by a smaller amount, ranging from 1.4% to 1% (for a capital increase from 10% to 11%) to 0.4% to 0.3% (for a capital increase from 14% to 15%); and, finally, the level of bank capital has no impact on the severity of crisis. 10  All speeches are available online at www.bankofengland.co.uk/speeches  10  Since the LEI report, a rich seam of the literature has emerged on the determinants of crises and their severity (∆). Some of the most illuminating pieces of this research have drawn on evidence from a long historical time-series and across multiple countries (for example, Jordà et al (2013), Taylor (2015)). The key findings are as follows. First, credit booms are probably the single most important determinant both of the likelihood of crises and of economic performance in the recovery after them (Schularick and Taylor (2012), Jordà et al (2013)). A sustained 1 percentage point increase in the credit-to-GDP ratio raises the probability of crisis from 4% to around 4.3% per year.
To ease and empower the user in manipulating and utilizing these new data we launched a new visualization tool developed in Power-BI. The lesson learned is also that to keep up with the changes and react promptly, we must continue encouraging the digital transformation of our organizations, incorporating advanced analytical techniques, and providing more timely and granular information that considers heterogeneity to complement conventional statistics. As the access to new large-volume databases and the use of granular data almost always poses the challenge of confidentiality, the Central Bank of Chile has sought to implement best practices and safeguards to exploit such information. With this objective, we established a Data Governance Agenda, led by a Strategic Committee that reports directly to the Board and whose executive management is located in the Statistics Division. Likewise, we are working on our Big Data Strategic Project, which contemplates a centralized data repository that all user areas can access. 2  Climate and distributional challenges Central banks actively participate in different initiatives to respond to the demands derived from climate change. In April 2022, the Intergovernmental Panel on Climate Change (IPCC) stressed the critical role of climate data in effectively aligning the financial sector with science-based decarbonization and adaptation goals.