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

    APRA Publishes Results of Climate Risk Self-Assessment Survey

    The Australian Prudential Regulation Authority (APRA) has published the findings of its latest climate risk self-assessment survey conducted across the banking, insurance, and superannuation industries.

    August 04, 2022 WebPage Regulatory News
    News

    ACPR Publishes Updates Related to CRD IV and Covered Bonds

    The French Prudential Supervisory Authority (ACPR) published a notice related to the methods for calculating and publishing prudential ratios under the Capital Requirements Directive (CRD IV) and the minimum requirement for own funds and eligible liabilities (MREL).

    August 03, 2022 WebPage Regulatory News
    News

    BIS Paper Contributes to Debate on Regulating NBFIs and Big Techs

    The Financial Stability Institute (FSI) of the Bank for International Settlements recently published a paper proposing a framework for classifying financial stability regulation as either entity-based or activity-based.

    August 03, 2022 WebPage Regulatory News
    News

    EIOPA Publishes Guidance on Climate Change Scenarios in ORSA

    The European Insurance and Occupational Pension Authority (EIOPA) published the risk dashboard based on Solvency II data and the final version of the application guidance on climate change materiality assessments and climate change scenarios in the Own Risk and Solvency Assessment (ORSA).

    August 02, 2022 WebPage Regulatory News
    News

    EBA and ECB Respond to Proposals on Sustainability Disclosures

    The European Banking Authority (EBA) and the European Central Bank (ECB) published their responses to the consultations of the International Sustainability Standards Board (ISSB) and the European Financial Reporting Advisory Group (EFRAG) on sustainability-related disclosure standards.

    August 01, 2022 WebPage Regulatory News
    News

    BIS Report Notes Existing Gaps in Climate Risk Data at Central Banks

    A Consultative Group on Risk Management (CGRM) at the Bank for International Settlements (BIS) published a report that examines incorporation of climate risks into the international reserve management framework.

    July 29, 2022 WebPage Regulatory News
    News

    EBA Publishes Multiple Regulatory Updates for Regulated Entities

    The European Banking Authority (EBA) published the final guidelines on liquidity requirements exemption for investment firms, updated version of its 5.2 filing rules document for supervisory reporting, and Single Rulebook Question and Answer (Q&A) updates in July 2022.

    July 29, 2022 WebPage Regulatory News
    News

    EIOPA Issues SII Taxonomy and Guide on Sustainability Preferences

    The European Insurance and Occupational Pensions Authority (EIOPA) published Version 2.8.0 of the Solvency II data point model (DPM) and XBRL taxonomy.

    July 29, 2022 WebPage Regulatory News
    News

    EESC Opines on Proposals on CRR and European Single Access Point

    The European Union published, in the Official Journal of the European Union, an opinion from the European Economic and Social Committee (EESC); the opinion is on the proposal for a regulation to amend the Capital Requirements Regulation (CRR).

    July 29, 2022 WebPage Regulatory News
    News

    HM Treasury Publishes Multiple Regulatory Updates in July 2022

    HM Treasury published a draft statutory instrument titled “The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2022,” along with the related explanatory memorandum and impact assessment.

    July 29, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8423