Page 1 of 2

Reported doubts about official coronavirus figures are putting research divisions to the test and finews.asia spoke to global banks about how to deal with less than reliable data.

In recent weeks, reports have cast widespread doubt about coronavirus infection figures released, especially from the health authorities of developing countries. 

A «Bloomberg» report citing U.S. intelligence officials called China’s public reporting on cases and deaths as «intentionally incomplete» and outright «fake». A report from «The Economist» last month named Philippines, Russia, Myanmar and Indonesia as other centuries that may have underreported. North Korea, which shares a 1,400-kilometer border and close economic ties with China, continues to insist there are zero cases. 

For the banking industry, which is not in the business of epidemiology, such doubts warrant not only a thorough review of sources but also a contingent in the event that a material gap from reality can be ascertained. To that end, what say the banks about data reliability and interpretation?

Alternative Capabilities

«Certain countries [and regions] naturally have more reliable and wider breadth of data, such as the U.S. and Europe. [But] for some developing economies, timely and reliable data may be hard to come by. Data may also be subject to revisions,» said Credit Suisse head of China economics David Wang. «To the extent possible, we talk to our sources on the ground.» 

In the case of China, Credit Suisse has a team based in Beijing – China Quantitative Insight (CQI) – which conducts regular surveys across key industries to provide econometric insights to bolster the views and forecasts of Wang’s teams. Surveys conducted cover a wide array of topics such as resumption of worker capacity or consumer behavior.

Credit Suisse is not alone in housing quant capabilities to support market and economic views with Goldman Sachs also incorporating alternative data such as web traffic, credit card data and linguistic analysis through hits Quantitative Investment Strategies (QIS) team which has specialists based in the U.S. Europe and Asia.