The Reliability of Today's Financial Macroindicators

Norges Bank’s key rate (sight deposit rate) is set on the basis of information concerning developments in a number of economic and financial variables. In order to provide the optimal basis for monetary policy decisions, it is important that these key indicators show results that are as correct as possible at the earliest possible point in time. The credit indicators C2 and C3, the money supply M2 and household net lending are important financial variables underlying monetary policy decisions. This article presents an analysis of the data quality of these indicators when they are initially published. Figures for household net lending in Norges Bank’s financial accounts are also compared with corresponding data calculated in the income account in the national accounts, which have been used as a reference in this discussion. We conclude that there are relatively small revisions to the C2 and M2 figures, and that the size of the revisions has been gradually reduced over the past few years. For credit from foreign sources, and thereby for C3, revisions of the figures are larger and more frequent. Household net lending is also revised over time, but the initially published figures capture the main features of the final figures relatively well