Interconnections within the financial sector make international
cooperation essential to monitor and respond to vulnerabilities.
In order to detect, for example, common exposures to particular
asset classes, or to gauge the ripple effects from the failure
of a particular institution, information is required from the
balance sheets of banks worldwide. Cooperation to promote
international data-sharing has a long history at the BIS. The
international banking and financial statistics collected by
central banks and compiled by the BIS have evolved substantially
over time, in response to the concerns of the day. The most
recent crisis highlighted some limitations in the statistics,
and forthcoming enhancements will address many of these. The
international financial crisis has reminded us once again of how
interconnections within the financial sector can amplify shocks.
A high degree of interconnectedness essentially set the dominoes
close to one another - except that unlike in the game, in the
financial system inte