Data Quality

Data quality comes by having a logical database structure, well described definitions of data-fields, good instructions to the users, rigorous validations rules and active use and feed back from its contributors.

PECDC wants to continuously improve the quality of data,

in terms of consistency:

  • across banks,
  • across asset classes
  • across the data-fields of an individual default observation,

and in terms of quantity:

  • Increase number of completed data fields per defaulted obligor;
  • Increase number of defaulted obligors by current and new Member-banks.

PECDC’ efforts toward constant data quality improvement go along 6 ways:

1. Consistency: all processes are governed by the Methodology Committee

2. Validation: multiple controls by the Data Agent in the data submission process

3. Documentation: a suite of supporting documents belonging to PECDC (see standards)

4. Scoring system: allowing the banks to compare their performance with their peers

5. Annual diligence: audit report to each Member-bank on selected key criteria

6. Semi annual Analytics Day: opportunity to share best practice in credit modelling and on how to use the database.

Scoring System

In order to encourage the Member-banks to improve the data quality, PECDC has created a scoring system. Based on 18 criteria – defined by the methodology criteria – the quality of each individual delivery is measured, i.e. expressed in percentages of fields filled in etc. Each Member-bank can see how its delivery compares to its peers’. The scoring is carried out semi-annually and reported to the Member-banks (on an anonymous basis). The content of the scoring is by nature evolutionary, reflecting how more or less essential each data is seen by the MethCom.

Annual Due diligence

Each Member-bank receives an annual visit by a PECDC executive to discuss:

· Improvement data field quality

· Improvement of coverage of data fields (completeness)

· Improvement of the coverage of all realized defaults.

This visit results in recommendations by PECDC how the Member-bank can improve its quality and an agreement between the Member-bank and PECDC on what will be done and when. The executive involved will keep a list on where PECDC stands on each Member-bank and for the PECDC as a whole.

Semi Annual Analytics day

Every year, in December and in June, the updated data-base – after the Spring and Fall data submissions- is presented by ALGORITHMICS to the Member-banks. On this occasion, the Methodology Committee will present the progress of the last 6 months and inform the Member-banks about new requirements and the progress of the various working groups under its supervision. In this meeting, the Member-banks are invited to show their own analyses on the database and what they have done with it. It makes this meeting an important date for the Member-banks, as they share knowledge, encouragement to improve data quality, and eventually their mutual trust in the dataset which is their common good.

Data Collection Process and Feed back

Two full data submissions and releases of the global data-set take place in May-June and in October-December, each year.

In 2008, the database has been substantially enriched, whilst the quality of data has been scrutinised in terms of completeness and consistency. A dialogue has been initiated between the Member-banks on “Best Practice Sharing”, i.e. how to best exploit the data output.

In the near future, the data-sets will be segmented and released by Asset Classes: Large Corporate and SME, Project Finance, Banks, Ship Finance, etc. In practice, this will not change much for the contributing banks since the data-set they receive is already restricted to the Asset Classes, which they participate to. But under the strict control of the contributing banks, each data-set will gain in depth and reliability.