The Financial Development Data : Methodology for Measuring Financial Development

Overview & Synopsis

Financial Development Data (FinData) is a new, annually updated database developed by the WorldBank Group to measure financial system development across up to 218 economies from 1980 onwards. Building on Čihák, Demirgüç-Kunt, Feyen, and Levine (2012), FinData adopts an expanded 4×4 conceptual framework that assesses four segments of the financial system — banks, non-bank financial institutions, equity markets, and debt markets — across four dimensions: depth, access, efficiency, and stability. This note describes the methodology underpinning the construction of FinData's composite indices. It details the sample definition and data coverage filters applied to the initial universe of 218 economies, the quality control procedures for source indicators, and the missing-data treatment designed to maximize coverage while minimizing reliance on imputation, with sensitivity analyses confirming that the proposed approach balances external plausibility, temporal stability, coverage, and interpretability relative to alternative missing-data treatments and normalization methods. The database integrates traditional banking and capital market indicators with digital finance and financial inclusion measures, providing a comprehensive and consistent basis for cross-country analysis of financial sector development.