The growing availability of detailed information in published corporate financial statements provides a key source for policy-relevant insights. These documents, rooted in formal accounting standards, typically offer a unique perspective on firms’ behaviour and vulnerabilities, contributing to monitoring broader economic developments and informing monetary and financial stability decisions.
Meanwhile, the content of financial statements is continuously expanding, as firms appear to increasingly disclose additional material in response to evolving regulations, accounting standards and societal expectations. In particular, sustainability issues, such as climate risk and carbon footprint, have become an integral part of corporate reports, even though gathering this information presents important challenges in terms of quality, harmonisation and certification practices.
Central banks have been actively combining information from corporate reports with other data, including of a non-public nature, to enhance their usefulness. Specifically, the growing digitalisation of economies has enabled the integration of new and alternative data sources to complement “traditional” financial reports, helping to address quality issues and coverage. These promising opportunities are reinforced by technological innovation, including big data analytics and artificial intelligence (AI), which allows for better access, processing and use of structured and unstructured data, helping to capture previously underutilised information.
As a result, both public and non-public corporate financial statement data can increasingly be leveraged to support central banks’ statistical, analytical and policy tasks. The greater availability of more comprehensive firm-level information can in particular allow to identify global and regional economic dynamics, facilitate the development of new indicators and forecasts, improve early warning systems and, more broadly, reveal hidden risks, especially during crises such as the Covid-19 pandemic. These elements are essential ingredients that inform monetary and financial stability policies, helping to design and calibrate public interventions and monitor their impact effectively.
Yet important challenges remain, in particular regarding the accessibility and interoperability of the vast amount of information contained in corporate reports, including supplementary disclosure such as management’s discussion and analysis. Fortunately, important international initiatives are under way to improve the coverage and quality of this information, especially in the area of sustainability disclosures.
Looking forward, making the most of financial statement data calls for a clear roadmap to enhance their accessibility and adequate sharing as well as their comparability and overall quality, in at least four main directions. First, enhancing the global statistical infrastructure appears to be a major requirement, particularly by further enhancing global common identifiers, information standards and, broadly, interoperability. Second, stronger collaboration among the various stakeholders involved in the corporate reporting ecosystem can facilitate adequate data-sharing and unlock the full potential of existing information. Third, innovation should be properly pursued to make the most of promising technologies, such as AI, while addressing the important challenges associated with their use. Ultimately, and perhaps more fundamentally, ensuring public trust in corporate disclosures and in turn in their use for official statistics and public policy is essential. From this perspective, central banks can play a key role as “data curators” to safeguard the quality, integrity and authenticity of financial statement data.