Featured Product

    ECB Paper Discusses Integration of Microdata for Policy Needs

    February 20, 2020

    ECB published a paper that discusses the policy need for microdata and highlights some of the practical uses of the interlinked data. The paper sheds more light on how information in different granular databases can be combined and aggregated in a flexible manner according to different business needs. It describes in detail the process of linking through a common stable identifier, points out current limitations, and suggests a possible way forward. The paper also highlights that full integration of granular credit datasets may result in new reporting requirements to facilitate supervisory decision-making processes.

    Since the financial crisis, central bank policymakers have expressed a need for more integrated microdata for monetary policy purposes and for macro-prudential and micro-prudential supervision, with a stronger focus on lending. In response to this policy need, the European System of Central Banks (ESCB) has increased the scope and quality of instrument-level data (for example, loan-by-loan) it collects. ESCB has further developed the Register of Institutions and Affiliates Data (RIAD), which is pivotal in ensuring the successful linking of the databases, because it ensures the unique identification of counterparties.

    Once full integration of the granular credit datasets, such as AnaCredit, Centralized Securities Database (CSDB), and the Securities Holdings Statistics Database (SHSDB), is achieved through RIAD, policymakers will have a powerful tool at their disposal to compute exposures and indebtedness at the entity and group levels. The unique identification of both the borrower/issuer and the lender/holder will allow different risk analyses to be performed, such as the identification of excessive concentrations of investments in asset classes with common features. Many actors within the ESCB are waiting for such a tool to help them tackle challenges by exploiting the power of granular data. In this respect, new challenges could be identified and new reporting requirements may be set to collect relevant information for central banking and supervisory decision-making processes. 

    A possible future expansion of the reporting requirements in RIAD to also cover groups of “connected clients” would be welcome. Authorities streamlining data requests to reduce the reporting burden will have major benefits. Reporting master data to a unique, centralized platform will avoid duplication of work and reduce inconsistencies among different datasets. Granular databases require powerful IT tools to efficiently handle the huge amount of data received, stored, and analyzed. There is a demand for the easy and dynamic visualization of group structures and the overlaps and differences between the multiple group structures that RIAD can generate. It is also important that IT tools are used to further develop data quality checks to verify not only the consistency but also the plausibility of the data provided. Efforts are underway to develop such data quality checks within the ESCB. Finally, there is a need to increase the use of Legal Entity Identifiers (LEIs) to allow a high level of data standardization, thus helping users to link, analyze, and compare different data sources in a fast, automated way.

     

    Related Link: Paper (PDF)

     

    Keywords: Europe, EU, Banking, Statistics, Microdata, Granular Data, Macro-Prudential Policy, RIAD, AnaCredit, ESCB, SHS, Reporting, ECB

    Featured Experts
    Related Articles
    News

    BIS Innovation Hub Sets Out Work Program for 2021

    BIS Innovation Hub published the work program for 2021, with focus on suptech and regtech, next-generation financial market infrastructure, central bank digital currencies, open finance, green finance, and cyber security.

    January 22, 2021 WebPage Regulatory News
    News

    EC Plans to Consult on Crisis Management and EDIS Framework Revisions

    In an article published by SRB, Mairead McGuinness, the European Commissioner for Financial Services, Financial Stability, and Capital Markets Union, discussed the progress and next steps toward completion of the Banking Union.

    January 21, 2021 WebPage Regulatory News
    News

    EBA Finalizes Remuneration Standards for Investment Firms in EU

    EBA finalized the two sets of draft regulatory technical standards on the identification of material risk-takers and on the classes of instruments used for remuneration under the Investment Firms Directive (IFD).

    January 21, 2021 WebPage Regulatory News
    News

    ECA Recommends Actions to Enhance Resolution Planning for Banks

    EC published, in the Official Journal of the European Union, a notification that the European Court of Auditors (ECA) has published a special report on resolution planning in the Single Resolution Mechanism.

    January 20, 2021 WebPage Regulatory News
    News

    BoE Publishes Key Elements of the 2021 Stress Testing for Banks in UK

    BoE published a scenario against which it will be stress testing banks in 2021, in addition to setting out the key elements of the 2021 stress test, guidance on the 2021 stress test, and the variable paths for the 2021 stress test.

    January 20, 2021 WebPage Regulatory News
    News

    PRA Proposes Rules on Identity Verification of Depositor Protection

    PRA published a consultation paper (CP3/21) proposes rules regarding the timing of identity verification required for eligibility of depositor protection under the Financial Services Compensation Scheme (FSCS).

    January 20, 2021 WebPage Regulatory News
    News

    FSB Publishes Work Program for 2021

    FSB published the work program for 2021, which reflects a strategic shift in priorities in the COVID-19 environment.

    January 20, 2021 WebPage Regulatory News
    News

    FCA Issues Update on Move to New Data Collection Platform

    FCA announced that 50% firms have started using the new data collection platform RegData, which is slated to replace the existing platform known Gabriel.

    January 20, 2021 WebPage Regulatory News
    News

    Bundesbank Publishes Derivation Rules for Reporting by Banks

    Bundesbank published Version 5.0 of the derivation rules for completeness check at the form level, with respect to the data quality of the European harmonized reporting system.

    January 19, 2021 WebPage Regulatory News
    News

    FED Revises Capital Planning and Stress Testing Requirements for Banks

    FED finalized a rule that updates capital planning requirements to reflect the new framework from 2019 that sorts large banks into categories, with requirements that are tailored to the risks of each category.

    January 19, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6488