The Office of Financial Research (“OFR”) issued guidance to regulators for collecting comprehensive and high-quality data for financial stability analysis, market monitoring, and policymaking. The guidance covers (i) the preparation of data, (ii) data transmission processes, (iii) data quality and (iv) common pitfalls in regulatory data collection.
The guidance recommends the following practices for regulators:
- define the business purpose for collecting data,
- design a template in order to establish the standard for developing data collection,
- develop clear and precise definitions, and
- create specifications for the data collection process.
Lofchie Comment: Here are a few more recommendations to add to the OFR’s list: (i) consider the costs of collecting the information, (ii) determine whether the means of requesting information are standardized adequately to yield comparable data from different sources, (iii) determine whether the means of transmitting the information actually exist, (iv) ascertain whether there is a way to store the information, (v) confirm that a method is in place for assessing the success or failure of the information program (and whether it should be modified or abandoned), and (vi) consider whether the information already may be available from other sources, such as from other agencies. In other words, consider the practicalities when seeking to collect data. As an example of what not to do, please review the experience of Form PF.