Better Data, Better Prices? Testing the GEMs Claim

The G20’s Capital Adequacy Framework review asked multilateral development banks to publish clearer statistics on risk. The Global Emerging Markets Risk Database Consortium (GEMs) has responded, releasing disaggregated default and recovery data in late 2024 and making it available on Bloomberg terminals. An AI layer, reportedly being developed with Galytix, is also in the works. The promise is straightforward: better data should narrow the gap between perceived and actual risk, and narrower gaps should translate into cheaper borrowing costs. Yet whether that promise holds depends on how investors, credit rating agencies, and governments use the numbers, and on whether governance around the dataset can overcome structural limitations.