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sherik

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Posts: 6
Reply with quote  #1 
In very brief manner the supervising activity in the Bank of Israel is based on monitoring of dozens of predefined indicators (generally at quarter basis) calculated for each bank and for the whole banking system (average) in attempt to figure out "cases" which are symptoms of dangerous behavior either for a specific bank or to the whole system.

The primary goal is to check whether banks are following the requirements of the Supervisor of Banks (in fact, by law they must follow these requirements) and the secondary goal, to figure out how and to which extent each bank is following the requirements, is more important.

The Latest Data section is intended to show the figures for the last quarter for each bank and for the whole banking system (essentially when speaking about a ratio, the banking system is an average value for all banks), position of each bank compared to this average and direction and the scope of changes.

This part of the data should match goals to be shown in a dashboard, though my visualization takes up a lot of space. I tried another forms of visualization but they were rejected by business staff as being anemic and poorly visualized.

My specific questions are:
1. What do you think about this visualization?
2. Which better visualization would you suggest?
3. Have you ever come across well designed dashboards for central banks over the internet? And if so, could you please share such links?

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Alex Sherman

danz

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Posts: 181
Reply with quote  #2 
Alex,

Last article of Stephen Few,  "Displaying change between two points in time", seems to be the reference you may need. Article link and comments related to his article you may find in this thread: http://sfew.websitetoolbox.com/post/displaying-change-between-two-points-in-time-6886820?pid=1283129078#post1283129078

Dan
jlbriggs

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Posts: 190
Reply with quote  #3 
I think there are a lot of possibilities for how to display this data.
The discussion that danz linked to demonstrates that there is not a clear best way to go about it.

I don't think there are any fundamental problems with the approach you've taken here.  It's kind of like a series of single point waterfall charts...

There are, however, some issues I have with the details.

1) I don't like that the title(s) takes up so much space.  You've used 1/4 of your vertical space for a title with two subtitles, all of which could be placed on a single line

2) I don't like all of the variation in font size, font style, font weight, font color, etc... It's pretty distracting.

3) the table of values being off to the left feels really clunky, and creates a disconnect between the plotted data and the tabled data values.

3) I don't generally care for trend arrows.  If I were to use them, I would much prefer a solid color, no border stroke, and a simple triangle shape.  It causes much less visual clutter that way.   But really, they're not needed.  You have the negative sign, you have color, a 3rd indicator seems over kill.

I would change some things around more like this:

http://jsfiddle.net/jlbriggs/Zh85L/19/embedded/result/
bank1.png 


* Reducing the number of colors, font sizes/styles/weights
* moving the table below the chart so that the data points line up
* removing the redundant data labels from the chart
* reducing wasted space from title layout issues


That being said, I think that this could be made more informative if multiple quarters were to be plotted at a time, and a line for each bank could take the place of the bar, showing the last 4 quarters change in one small line.

Something like this:

http://jsfiddle.net/jlbriggs/zGELL/embedded/result/

bank2.png     

(I would also update the table below the data to include the 4 values for each bank. Also, the math won't work, I just made up numbers for the example)

This way, you get a lot more context as to 'up' vs' down'.
The biggest problem with just up/down is that it it's missing all of the context of what happened before.

We may be down this quarter from last, but maybe last quarter was an unusual spike, for example.
With this kind of set up, you get the overall trend, the current data point, the inter-category comparison, and the comparison to overall, all in one clean shot.
sherik

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Posts: 6
Reply with quote  #4 

Thanks to Dan and jlbriggs for finding the time to look at my example and suggestions.

Regarding multiple quarters data my interactive report has 3 sections:  Latest Data, Short History (9 quarters) and History. I started with the first one and I hope to continue, to publish more charts and to get more criticism and more suggestions.
Thank you all again


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Alex Sherman
wd

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Posts: 167
Reply with quote  #5 
Alex;  I suppose there are some protocol requirements that need to be followed, however ... 

I would likely not build 3 reports, i.e. recent, short history and history.  To see context (which is a most important aspect of analysis and decision making), one needs history (and the history should be right there with the latest, not on some other screen or page). 

Furthermore, appropriate conclusions should be made through appropriate analysis and then stated so that the reader need not make his own conclusions (two readers may not come to the same conclusion if their "analysis" is visually based).  Trends for example, aren't statistically significant unless there are at least 6 points in a row that are headed steadily in the same direction (per Western Electric rules, the standard protocol for such analysis (http://www.quinn-curtis.com/spcnamedrulesets.htm)).  To know whether a process is behaving in statistically stable manner, one needs to have a base period of at least 24 points. 

This is a radical departure from the way many / most financial reports are done today, i.e. two point comparisons where the points are considered to be "different" -  but only within the context of normal variation - and thus not statistically different.

Something to ponder,

wd

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Bill Droogendyk
jlbriggs

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Posts: 190
Reply with quote  #6 
Quote:
Originally Posted by wd

I would likely not build 3 reports, i.e. recent, short history and history.  To see context (which is a most important aspect of analysis and decision making), one needs history (and the history should be right there with the latest, not on some other screen or page). 


I couldn't agree more.
sherik

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Posts: 6
Reply with quote  #7 
Thank all of you to finding time to look at my work and suggestions and criticism.
Having been an IT person I would like to “underline” several points.
1.    The key goals I wished to reach in this project are:
a.    A generic solution to various kinds of ratios used in the supervision activity in the Bank of Israel, which can be simply adjusted from ratio to ratio differences.
b.    Better and “right” data visualizations then those which were used previously.
c.    Enable interactivity of visualizations including simulation, filtering, and highlighting.
2.    The ideas and suggestions which come from discussion help me to overcome some “wrong” requirements coming from our business staff. These requirements are probably based on old habits and wish to see things as business people used to see for many years.
3.    The project I am speaking about is intended for use by staff in the Supervision Division of the Bank of Israel. The staff in the Supervision Division works with a limited number of banks (7 in the shown case) and generally has most of figures in mind, including historical data, especially at critical points of banking activities. So, when the latest data is published by banks, the main issue is what happened in the last month/quarter compared to previous reported data.
4.    Business people working with this data are partly accountants and partly economists. The first group emphasizes in exact figures and less in trends, the second – more in trends and less in exact figures.
5.    I wrote in my pevious post that my report had 3 sections. I was not talking about 3 reports. There are 3 groups of charts in 1 report in order to give different resolution: Latest Data and Short History have both figures and trends, History shows more trends than figures.
The Short History section is intended to show the development of the specific ratio for last nine quarters for each bank compared to other banks and to average (Banking System).
This section includes a number of items and I publish today some of them hoping to get your ideas and suggestions about them.
The first chart is:
15.jpg
As I already wrote I was asked (by accountants) to publish exact figures. So this section includes a heatmap table showing the exact figures for nine quarters history, min and max values and when they were reached and last data. The heatmap is accompanied with bandlines which mainly show trend for each bank and compared with average per date:
2.jpg 
Hoping to hear from you all soon.

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Alex Sherman

wd

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Posts: 167
Reply with quote  #8 
Re: Business people working with this data are partly accountants and partly economists. The first group emphasizes in exact figures and less in trends, the second – more in trends and less in exact figures.

"Interesting" that even -0.003% deserves a downward red arrow - that's 30 parts per million! Is the underlying data that exact!

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Bill Droogendyk
sherik

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Posts: 6
Reply with quote  #9 

Hi Bill,

The data you are looking at is the exact real data reported and published by banks.

Your wonder and question is obvious to me, by let me try to explain the issue to you.

The explanation lies in the specifics of banking business and in the management of this business.

As you may know, Basel III is a global, voluntary regulatory standard on bank capital adequacy, stress testing and market liquidity risk. Basel III was developed in response to the deficiencies in financial regulation revealed by the late-2000s financial crisis. Basel III was supposed to strengthen bank capital requirements by increasing bank liquidity and decreasing bank leverage.

As part of implementing Basel III in Israel, the Supervisor of Banks ordered the banks to get prepared to reach at least a 12.5% capital ratio by the end of 2014 and two largest banks: Hapoalim and Leumi were ordered to reach even a higher minimal ratio of 13.5% by the end of 2016.

Simplifying business, the capital ratio consists of 2 main components: own funds capital and subordinated debt (bonds). In Basel III, the terms of the bonds that could be recognized for the capital ratio are different from the terms which were used before. The new terms are effective from 1/1/2014, however, because the new terms are not fully realized, the banks are not able to issue those kinds of bonds.

As the result of the above, banks issued bonds with the old terms as much as they were allowed, thus their capital ratio went up. Beginning from a certain quarter (2013Q2) their capital ratio started to decline because they could not issue new bonds while the old ones were repaid.

Taking into account that Banking Industry is in general a relatively slow changing system and if Banking System in particular is stable the declines exist but are very small in size.

This process is reflected by a very slight decline of total capital ratio starting from 2013Q3.

As I already wrote in one of previous posts this report and charts are intended to be used internally in the Supervision Division of the Bank of Israel.

So this small red decline gives to the staff the indication (though it is an indirect indication) of the fact that banks started their preparations as they were ordered.

Hoping I was clear


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Alex Sherman
PeterRobinson

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Posts: 33
Reply with quote  #10 

> So this small red decline gives to the staff the indication (though it is an indirect indication) of the fact that banks started their preparations as they were ordered


Do you mean that the 0.003% decline is an indication that the banks have started their change as ordered?

If so, it is counter-intuitive to have it marked red which is often used to indicate a warning.


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Peter Robinson
in Brisbane, Australia
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