Seminar on Use of Surveys by Central Banks

The seminar was held in virtual format, from July 5 to 7, 2021. The main objective of the seminar was to constitute a forum of experts with the purpose of presenting some of the advances that have been achieved in this matter in central banks and promote the exchange of experiences and ideas among them.

Surveys are a very important mean by which central banks generate economic information that contributes to a better monitoring of economic and financial activity, with timely indicators of its evolution and of early warning of possible risks arising; as well as indicators that allow authorities to assess the impact of their policy decisions on the economy and the financial system. The methodological and technical rigor applied to the development of the surveys ensures that their results constitute very valuable information that, complemented with a quality analysis, contribute to the generation of fundamental elements for the aforementioned decision-making process.

In general, the presentations made by the central bank officials covered the methodological aspects of the design and application of the surveys, and commented on the analytical usefulness of the results obtained for the central bank authorities and for other users. The diversity of topics covered in the presentations that made up the seminar's agenda are a reflection of the importance that surveys have in different areas of central banks.

First day of sessions

The Banco de México presented the Survey on the Expectations of Specialists in Economics of the Private Sector (EEEESP; acronym in Spanish), which is collected among the main groups of economic analysis and consulting of the national and foreign private sector. Its purpose is to gather analysts' expectations in relation to various economic indicators such as inflation, real GDP growth, interest rates, exchange rate, labor market, public finances, external accounts, as well as their perception about the current economic environment. The EEEESP serves as an input to formulate and measure the impact of monetary policy, as a benchmark against which to compare forecasting models, as a source for users who require forecasts of some economic indicators for their activities, and as a source of information for conducting research on various economic topics, such as, among others: Investigating the determinants of the neutral interest rate in Mexico; to forecast changes in monetary policy in Mexico; and to investigate the impact of uncertainty on the volatility of the Mexican peso - US dollar exchange rate.

The Banco Central del Ecuador commented on the results of two surveys: i) The Business Opinion Study (EMOE; acronym in Spanish), which monitors the current situation of the variables of sales, production, employed personnel in four productive sectors (commerce, construction, industry and services) and an Index of Business Confidence is elaborated. Likewise, the results serve as input for the elaboration of the quarterly national accounts and for the analysis of the current and future situation of private companies in the country; and, ii) The Credit Supply and Demand Study (ETOD; acronym in Spanish). By mean of this study, they qualitatively determine the behavior of the credit market; they collect information on the factors that would cause changes in the evolution of the volume of credit; and they identify stages of credit slowdown or of relaxation in the conditions of access to credit. The objectives of the survey are: to expand the available credit information; identify the supply and demand factors that explain the evolution of the volume of credit in the different credit segments; capture the evolution of credit standards and conditions; and to identify the destination of the credit requested by the companies. The credit segments considered are productive, housing, consumer and microcredit; and the activity sectors are those of industry, commerce, construction and services.

The Banco Central de Chile presented the results of two surveys: i) The Survey of Economic Expectations, which is applied to a group of academics, consultants and executives from the private sector. It contains questions related to expectations about: inflation; monetary policy rate and nominal and real interest rates; exchange rate; economic activity; components of demand (household consumption and gross fixed capital formation); and a long-term structural parameters module (only in the surveys prior to the Monetary Policy Reports). The results of the survey are important elements that are considered in the monetary policy decision-making process and in measuring the impact of monetary policy on the economy; and, ii) The Household Financial Survey (EFH; acronym in Spanish). The study of household finances contributes to having a broader understanding of their behavior within the financial system and allows generating instruments for monitoring their financial situation. Both dimensions are of great importance to the central bank's objectives of financial and price stability. The EFH target population corresponds to urban households in Chile. The results of the survey are used as a source of information for the Financial Stability Report, for financial regulation activities and for research work on issues related to household finances.

The presentation of Banco de España was about its Family Financial Survey (EFF; acronym in Spanish). This is a household survey, carried out since 2002, on the financial situation and decisions of families in Spain. It is the only statistical source that allows relating the income, assets, debts and spending of families. The EFF incorporates two distinctive characteristics: It has an over-representation of households with a high level of wealth, with the aim of achieving better precision in this group of households, given that they have a greater interaction with the financial sector; and, it contains a longitudinal component of the data, that is, families who have previously collaborated are interviewed again, and there is a refreshment sample. EFF data is used regularly in notes on policy decision-making, analytical papers, annual reports and Banco de España working documents, among which are: Inequality of income, consumption and wealth in Spain; The housing market in Spain between 2014 and 2019; Monetary Policy and Household Inequality; and, Changes in the portfolios of Spanish households throughout the life cycle.

Second day of sessions

The Banco de España presented the results of the Bank Loan Survey. The same survey is applied in all eurozone countries. The objective of the survey is to improve the knowledge about financial conditions and the transmission mechanisms of monetary policy. It was noted that, although the authorities have very detailed quantitative information on the credit market, the survey provides qualitative information that contributes to a more complete analysis, identifying supply and demand factors that explain the evolution of credit market. The survey is applied to banking institutions, ensuring that the sample is representative of the market structure, and to companies and households. Their perception is asked about whether factors such as the criteria for granting loans and the conditions applied (interest rates, terms, etc.) have changed, if they have observed changes in these variables and if they have expectations of future changes. The analysis carried out on the results of the survey indicates that the variations in the criteria for granting loans and in demand are related to the evolution of credit; that these factors explain the main causes behind a tightening of the granting criteria (periods of crisis) or of a relaxation (periods of expansion); and the correlation coefficients confirm the predictive power of the survey as a leading indicator of credit.

The Banco de la República (Colombia) commented on its Risk Perception Survey. This survey seeks to identify the perception of systemic risks by the agents of the financial system in terms of the probability of occurrence of adverse events, the potential impact of adverse events, and the confidence in the financial system. The respondents are directors of the risk and research areas of financial institutions, and representatives of non-financial institutions (unions, research centers, universities, among others). It asks about the possible existence of general risks (free answer question), of specific risks (deterioration of the economic outlook in Colombia, materialization of credit risk, deterioration of the world economic outlook, volatility in the capital market, capital outflows, exchange rate volatility) requesting the probability of occurrence, and whether if they consider if the risk is of systemic impact or individual impact. In this way, the risks with the highest probability of occurrence are identified and whether they constitute a systemic or individual risk for the financial system.

The Banco de México presented the Monthly Survey of Regional Economic Activity (EMAER; acronym in Spanish). This survey addresses the need for timely regional indicators on the performance of the manufacturing and non-manufacturing sectors, and to measure the short-term expectations of entrepreneurs. The target population is establishments in the manufacturing and non-manufacturing sectors with more than 100 workers. Its thematic coverage includes economic indicators of the company, factors limiting the growth of economic activity, and conjuncture aspects such as the effects on companies due to the spread of COVID-19, among others. The results of the EMAER allow to investigate unexpected and sudden phenomena and, with this, to obtain timely information; evaluate the evolution of the impacts or the development of an event at the regional and sectoral level over time; capture differentiated impacts in regions and sectors; obtain quantitative information, beyond the qualitative opinion that is collected regularly; and inquire about rare events in an innovative and creative way.

The Banco Central de Chile covered the topic of the Use of Surveys to Characterize the Perceptions of Chilean Companies during COVID. The objective of the survey is to investigate the perceptions and expectations of the companies, and that statistical quality criteria are met while maintaining the focus on the timeliness of the data. The survey is applied to company managers, with a representative sample at a national level. The information generated from the survey has 3 main uses: Analysis and interpretation of the current situation, adjustment of projections and generation of risk scenarios. In the conjunctural case of the COVID pandemic, the survey made it possible to assess the impact expected by the companies on economic activity and investment expectations; the possible effects on the labor market; identify the emergence of cash flow problems of the companies; the economic performance of companies during the pandemic; and their expectations about the performance of companies for 2021 compared to 2020.

Third day of sessions

The Banco de España made a presentation on The New Bank of Spain Business Survey (EBAE; acronym in Spanish). This survey seeks to improve the diagnosis of the current situation of the Spanish economy. Its main objective is to collect the perception of companies on the current situation, capturing qualitative information on the short-term evolution of activity, employment and prices in Spanish companies. In the context of the COVID-19 crisis, questions were included about the impact of the crisis and the policy measures put in place to mitigate its effects. The EBAE has become a very useful tool for conjunctural analysis, in a very demanding context for making forecasts, also with very relevant information on the current situation of growing inflationary pressures. Likewise, it provides very rich information by branches of activity that is essential in the current context, given the high heterogeneity observed in the impact of this pandemic, and provides information on the prospects for recovery.

The presentation of the Banco Central del Uruguay (BCU) was on the Use of Surveys to Large Companies to Estimate the Balance of Payments and the International Investment Position (EGESE; acronym in Spanish). They have two EGESE, one of annual application and the other quarterly. It is a multipurpose survey that seeks to capture information on all transactions and positions of private sector companies with the rest of the world, to incorporate it into the international accounts statistics. It is applied to Non-Financial Companies and Financial Companies not required to submit financial statements to the BCU. It allows analysis to be carried out by grouping companies according to whether they are FDI, service exporters or merchandise traders. The quarterly EGESE (which is applied to a sample of the companies that respond to the annual survey and captures less detail of the information) in addition to being used to improve the quarterly distribution of the data obtained in the annual EGESE, allows to capture and analyze conjunctural situations. The results derived from these surveys have been very useful to improve the quality and timeliness of the international accounts statistics generated by the BCU.

The Banco de México presented the results of its Survey on Cash and Other Issues of Interest. Since the second half of 2008, they have conducted quarterly surveys at the national level, face to face in households, to know the perception of the people on cash issues. The subjects evaluated in the survey include commercial banks´ communication campaigns and services, the evaluation of uses and habits of cash; the use of ATMs and bank cashiers; the preference of the denominations of the bills and coins; the physical condition of the banknotes; the counterfeiting of banknotes; the security elements in the banknotes; and, the evaluation of other means of payment (debit card, credit, etc.). Among the indicators obtained are: the degree of satisfaction in the mix of denominations, the percentage of people who remember at least 2 security elements, and a quality index of the banknotes in circulation. The results of the survey made it possible to identify that people prefer the use of banknotes over coins; that they are not interested in the theme showed in the banknotes, but in their usefulness; and that as a result of the COVID pandemic, there was a change in the way of doing operations, since people preferred not to use cash, considering that they could get infected.

The Banco Central de Honduras commented on the various surveys they have, which cover issues of the real and external sectors, opinion and expectations surveys, and on prices. In particular, it was commented on the Survey of Expectations of Macroeconomic Analysts. Its objective is to consult the expectations on the main macroeconomic variables of the country (inflation, economic activity, exchange rate, monetary policy rate, among others) in the short and medium term and to have an anticipated panorama of the economic behavior. A select group of macroeconomic analysts from different sectors of the society are consulted in order to expand the analysis instruments available for the design of monetary, credit and exchange policy measures in the country.

The Banco Central de la República Dominicana (BCRD) made a presentation on the Characteristics, importance and uses of macroeconomic surveys at the BCRD. The purpose of the surveys is to capture the perception of the current state of the economy and the expectations that economic agents have (of variables such as prices, production, exchange rate, credit, sales, orders, income, etc.); to help assess confidence in monetary policy; serve as input for projection models and provide elements for conjunctural monitoring of different sectors. In this way, they provide indicators that serve in the policy decision-making process of monetary authorities and economic agents. Among the works and research derived from the surveys are the following: Prediction of economic activity based on indicators from the Business Opinion Surveys: evidence for the Dominican Republic; Composite indicators of economic activity by sectors for the Dominican Republic; Uncertainty, Monetary Policy Management and Entropy of Expectations in the Dominican Republic: An Analysis Based on Text Mining and Neural Networks. In the context of the COVID pandemic, they incorporated conjunctural questions in the Survey of Macroeconomic Expectations, in the Business Opinion Survey and in the Survey of Credit Conditions. The results obtained indicated that the prospects of industrial entrepreneurs, economic analysts and financial entities deteriorated significantly with the pandemic; that the expected recovery times of the macroeconomic variables ranged from 3 to 18 months; and that businessmen in the industrial sector were consistently more optimistic than analysts and banks. In retrospect, the duration of the shock on macro variables turned out to be more persistent than initially expected by the agents.

 

Monday, July 5

Session 1. Survey on the Expectations of Specialists in the Economy of the Private Sector in Mexico
Gabriela López Noria
Banco de México

Session 2. Business Opinion Study and Credit Supply and Demand Study
Geomara Garrido Raza y Jessica Peñafiel Plazarte
Banco Central del Ecuador

Session 3. Experience of the Banco Central de Chile in conducting Economic Expectations Surveys and Household Finances Survey
Javiera Vásquez
Banco Central de Chile

Session 4. Survey of Household Finances
Laura Crespo Azofra
Banco de España

 

Tuesday, July 6

Session 5. Bank Lending Survey
Álvaro Menéndez Pujadas
Banco de España

Session 6. Risk perception surveys - Colombian experience
Santiago Gamba Santamaría
Banco de la República (Colombia)

Session 7. Banco de México´s Monthly Survey of Regional Economic Activity
Miriam Juárez Torres
Banco de México

Session 8. Use of surveys to characterize the perceptions of Chilean companies during COVID
Daniel Pérez
Banco Central de Chile

 

Wednesday, July 7

Session 9. The new survey to companies of the Banco de España
Mario Izquierdo
Banco de España

Session 10. The use of surveys to Large Companies to estimate BP and IIP: The experience of Uruguay
María Fernanda Colombo, Agustín Fernández Rosenberg y Joaquín Bertinat Barrios
Banco Central del Uruguay

Session 11. Surveys on cash and other topics of interest to Banco de México
José Daniel Fernández Ruíz
Banco de México

Session 12. Economic Surveys of the Banco Central de Honduras
Horacio Armando Laínez Pineda
Banco Central de Honduras

Session 13. Macroeconomic Surveys: characteristics, importance and uses in the Banco Central de la República Dominicana
Oscar Iván Pascual
Banco Central de la República Dominicana

 

Banco Central de Chile      
Javiera Vásquez       
Daniel Pérez Klein

Banco de la República (Colombia)
Santiago Gamba Santamaría
           
Banco Central del Ecuador
Geomara Garrido Raza
Jessica Peñafiel Plazarte

Banco de España    
Laura Crespo Azofra 
Álvaro Menéndez Pujadas    
Mario Izquierdo         

Banco Central de Honduras          
Horacio Armando Laínez Pineda

Banco de México    
Gabriela López Noria
Miriam Juárez Torres            
José Daniel Fernández Ruiz

Banco Central de la República Dominicana
Oscar Iván Pascual Vásquez            

Banco Central del Uruguay
María Fernanda Colombo     
Agustín Fernández Rosenberg        
Joaquín Bertinat Barrios