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Doubts over official coronavirus figures are putting research divisions at banks to the test. finews.com on how firms are coping with less than reliable data.

In recent weeks, questions over coronavirus infection figures released, especially from the health authorities of developing countries, have emerged.

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

Seeking Alternatives 

For the banking industry, which for all its highly-trained minds is not in the business of epidemiology, such doubts warrant thorough review of sources. They also highlight the need for a contingent in the event that a big gap from reality can be ascertained. What are the banks saying about data reliability and interpretation?

While countries like the U.S. and regions like Europe are proving reliable, «for some developing economies, timely and reliable data may be hard to come by,» Credit Suisse head of China economics David Wang told finews.com. «Data may also be subject to revisions,» he noted. «To the extent possible, we talk to our sources on the ground.» 

Quantitative Teams

The Swiss bank maintains a team 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: Goldman Sachs also incorporating alternative data such as web traffic, credit card data and linguistic analysis through its Quantitative Investment Strategies (QIS) team which has specialists based in the U.S. Europe and Asia.