Featured Product

    BCBS Gauges Progress on Implementation of Data Aggregation Principles

    April 29, 2020

    BCBS published the latest progress report on implementation of the BCBS 239 principles, also known as the Principles for effective risk data aggregation and reporting, by banks. The report reviews progress of 34 global systemically important banks (G-SIBs) in implementing the principles as of the end of 2018, with the assessment having been completed before onset of the COVID-19 pandemic. The assessment concludes that none of the banks are fully compliant with the principles in terms of building up the necessary data architecture and, for many, IT infrastructure remains difficult. However, banks' efforts to implement the principles have resulted in tangible progress in several key areas, including governance, risk data aggregation capabilities, and reporting practices.

    Despite the improved overall performance, no bank has been assessed as fully compliant with all the principles in this assessment. This contrasts with the 2017 assessment exercise, in which three banks had qualified for the rating of “4” (the highest rating) for all principles. Increased awareness among banks has resulted in better in-depth analysis and this, together with the expanded scope of projects aimed at implementing the principles, partially explains the ratings downgrades. Many banks have expanded their implementation scope beyond risk data management to incorporate strategic initiatives—including regulatory reporting, financial reporting, and recovery and resolution planning—into their BCBS 239 implementation programs. Supervisors observed notable improvements in banks’ overarching governance, risk data aggregation capabilities, and reporting practices. In particular, banks have:

    • Established enterprise data strategies and data management frameworks and appointed relevant governance committees and managers for key roles in data management (such as data-owners and -stewards) to improve data oversight
    • Improved data dictionaries, which is a key aspect of Principle 3, enterprise data quality metrics, and data lineage
    • Enhanced quality assurance, allowing identification and correction of data quality issues
    • Initiated automated reporting platforms, which strengthen ad hoc reporting capabilities
    • Established group-level reporting policies, which set out the periodicity and dissemination of reports

    As per the progress report, the reasons why banks have been unable to effectively implement the Principle 2 on data architecture and IT infrastructure have not changed drastically over the years. Banks have unaligned IT solutions and legacy systems, which hamper reconciliations of risk data. This hinders banks from producing accurate reports with sufficient granularity to meet ad hoc data requests. This also explains the challenges faced by banks in implementing Principles 3 (accuracy and integrity), 5 (timeliness), 6 (adaptability), and 7 (accuracy). Appendix 2 to the report provides more detailed examples of effective and ineffective practices among banks for implementing the Principles. BCBS will continue to monitor the progress of G-SIBs in adopting the principles. Nevertheless, to promote full adoption of the Principles, the Committee has made the following recommendations: 

    • Banks should continue to closely monitor their implementation of the principles, adapting them as necessary to take into account any changes in the financial sector. Banks that have struggled to implement the principles should address weaknesses promptly, which may include committing the resources needed to complete data architecture and IT infrastructure improvement projects. 
    • Supervisors should continue to monitor the progress made by banks in implementing the principles. Supervisors should also take appropriate measures to address delays and ineffective implementation

     

    Related Links

    Keywords: International, Banking, Reporting, Data Aggregation, BCBS 239, Progress Report, G-SIBs, Statistical Reporting, BCBS

    Featured Experts
    Related Articles
    News

    EU Amends CRD4 and CRD5 as Part of Capital Markets Recovery Package

    EU published Directive 2021/338, which amends the Markets in Financial Instruments Directive (MiFID) II and the Capital Requirements Directives (CRD 4 and 5) to facilitate recovery from the COVID-19 crisis.

    February 26, 2021 WebPage Regulatory News
    News

    EU Committee Recommends Systemic Risk Buffer of 4.5% in Norway

    The Standing Committee of the European Free Trade Association (EFTA) recommended that a systemic risk buffer level of 4.5% for domestic exposures can be considered appropriate for addressing the identified systemic risks to the stability of the financial system in Norway.

    February 25, 2021 WebPage Regulatory News
    News

    PRA Clarifies Approach to Onshoring of Credit Risk Rules for UK Banks

    In a recent statement, PRA clarified its approach to the application of certain EU regulatory technical standards and EBA guidelines on standardized and internal ratings-based approaches to credit risk, following the end of the Brexit transition.

    February 25, 2021 WebPage Regulatory News
    News

    FSB Sets Out Work Priorities for 2021

    In a recently published letter addressed to the G20 finance ministers and central bank governors, the FSB Chair Randal K. Quarles has set out the key FSB priorities for 2021.

    February 25, 2021 WebPage Regulatory News
    News

    EU Publishes Corrigendum to Revised Capital Requirements Regulation

    EU published, in the Official Journal of the European Union, a corrigendum to the revised Capital Requirements Regulation (CRR2 or Regulation 2019/876).

    February 25, 2021 WebPage Regulatory News
    News

    ESAs Issue Statement on Application of Sustainability Disclosures Rule

    ESAs published a joint supervisory statement on the effective and consistent application and on national supervision of the regulation on sustainability-related disclosures in the financial services sector (SFDR).

    February 25, 2021 WebPage Regulatory News
    News

    EC Consults on Crisis Management and Deposit Insurance Frameworks

    EC published a public consultation on the review of crisis management and deposit insurance frameworks in EU.

    February 25, 2021 WebPage Regulatory News
    News

    HKMA Enhances Loan Guarantee Scheme to Alleviate Pressure on SMEs

    HKMA announced that enhancements will be made to the Special 100% Loan Guarantee of the SME Financing Guarantee Scheme (SFGS) and the application period will be extended to December 31, 2021.

    February 24, 2021 WebPage Regulatory News
    News

    EBA Proposes Standards for Supervisory Cooperation Under IFD

    EBA launched consultations on the regulatory and implementing technical standards on cooperation and information exchange between competent authorities involved in prudential supervision of investment firms.

    February 24, 2021 WebPage Regulatory News
    News

    BoE Addresses Banks in Scope of First Resolvability Assessment

    BoE issued a letter to the CEOs of eight major UK banks that are in scope of the first Resolvability Assessment Framework (RAF) reporting and disclosure cycle.

    February 24, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6629