As part of the recent developments, the European Central Bank (ECB) published an opinion on the draft legislative framework on liquidation of credit institutions, the results of recent euro area bank lending survey, and the aggregated statistics on less significant institutions (LSIs) for the first time. ECB also imposed an administrative penalty of EUR 6.63 million on Goldman Sachs Bank Europe SE for wrongly reporting calculated risk-weighted assets for credit risk. Last but not the least, ECB updated the overview on the integrated reporting framework (IReF) and announced plans to conduct a complementary cost-benefit assessment for the implementation of IReF between May 05, 2023 and July 31, 2023. The publication of results of this assessment is expected toward the end of 2023.
After analyzing the benefits and costs based on the feedback received from stakeholders, the Eurosystem will draft an ECB regulation on the IReF. This draft regulation will be subject to a public consultation, which is planned for 2024, before the regulation is finalized and adopted. The regulation will then replace the existing legal provisions on the collection of datasets within IReF and the relevant existing ECB regulations will be repealed or amended, as applicable. The following are the key aspects addressed in this recent cost-benefit analysis:
- Integration of country-specific requirements that are common across euro area into the common IReF reporting scheme
- Closer alignment between the IReF and FINREP solo reporting, which is expected to be beneficial for both reporting agents and authorities
- Reporting modalities of IReF, covering types of data submission, reporting schedules, and early submission of counterparty reference data
- Additional features to optimize analytical value of IReF such as tracking changes in instrument identifiers, statistics related to climate change, protection allocated value eligible for credit risk mitigation under the Capital Requirements Regulation, reporting probabilities of default, and governing law of loan agreements
In addition ECB proposed the establishment of a Joint Bank Reporting Committee (JBRC), which should comprise representatives from the relevant European and national authorities and involve the banking industry in a permanent way. The committee should advise on how to best integrate statistical, resolution, and prudential data reporting and to steer the data-sharing process. Authorities are expected to collaborate actively to set up this committee in the course of 2023. ECB also updated the document providing an overview of the IReF, which is primarily intended to cover credit institutions and deposit-taking corporations other than credit institutions. In the initial phase, the IReF is focusing primarily on ECB statistical datasets relating to banks and will cover the requirements of the ECB regulations on BSI and MIR statistics, SHS-S, and AnaCredit. The MIR and AnaCredit regulations would be repealed, and the BSI and SHS regulations recast or amended to exclude deposit-taking corporations from the reporting populations. Subject to the adoption of the IReF Regulation by the ECB Governing Council in 2025, the IReF is expected to go live in 2027.
In short, the overall ECB approach to standardize data reporting by banks builds on three pillars:
- Cooperation with other European authorities to integrate statistical and prudential reporting under the future Joint Bank Reporting Committee
- The Integrated Reporting Framework (IReF) to integrate existing statistical reporting as a first step toward broader integration
- Cooperation with the banking industry to develop a unified approach through the Banks’ Integrated Reporting Dictionary (BIRD), which supports banks in reducing their efforts to correctly and uniformly extract information stored in their internal systems, such that they can fulfil their reporting requirements more efficiently.
- IReF Announcements
- IReF Cost-Benefit Assessment
- Cost-Benefit Assessment Questionnaire (PDF)
- Presentation on Cost-Benefit Assessment (PDF)
- Updated Overview on IReF (PDF)
- Opinion on Liquidation of Credit Institutions
- Bank Lending Survey
- Statistics on Less Significant Entities
- Sanctions on Goldman Sachs
Keywords: Europe, EU, Banking, Basel, Reporting, IReF, Resolution Framework, Lending, Less Significant Credit Institutions, Goldman Sachs, Liquidity Risk, ECB
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