Featured Product

    EC Publishes Results of Fitness Check of Reporting Requirements in EU

    November 07, 2019

    EC published results of the fitness check of supervisory reporting requirements in financial services legislation in EU. The fitness check is a follow-up to the feedback received in the EC Call for Evidence and in a number of sectoral legislative reviews. The results show that the supervisory reporting rules, which have been put in place since the financial crisis, have been effective in delivering the necessary data. However, the assessment shows that reporting is not as efficient as it could be. The fitness check suggests a comprehensive approach by EC and the relevant stakeholders to further streamline the requirements and develop a supervisory reporting that is fit for the future.

    The results highlight that there are inconsistencies between reporting rules, which not only increase the administrative burden for financial institutions and other market participants but also reduce the quality and usability of the data for supervisors. Additionally, the recent trend toward data-driven monitoring and advances in data technology will require more high-quality and granular data going forward. Targeted improvements are under way and even completed in some cases. The fitness check also highlights the need for a comprehensive approach by EC and the relevant stakeholders. This will require improvements in different areas, including the following:

    • Legislative process and instruments. There is scope for improving the design of primary (Level 1) legislation, including the need for clear and consistent empowerment for ESAs to develop the necessary technical standards in secondary (Level 2) legislation and for better consideration of implementation timelines.
    • Data needs and uses. There is a case for further review of what data supervisors actually need, for what purpose, and what data they already have access to. More feedback and better communication on the purposes and actual use of the data, insofar as feasible and compatible with the nature of supervision, could help address concerns that supervisors request data that is "nice-to-have" as opposed to necessary and actually used.
    • Consistency and harmonization. In addition to common definitions and terminology, there is a case for greater use of standards, including for identifiers and data formats. Consistent definitions and standards enhance comparability, communication, and streamlined processes, both within firms and with supervisors, facilitating automation and reducing the costs related to data collection and analysis. There is also scope for improving the interplay between EU and national reporting, given industry concerns about flexibility in national implementation and additional national reporting requirements.
    • Governance. There is scope for more coordination and cooperation between stakeholders, from the early design phase through to data sharing between authorities.
    • Technology. Although alternative solutions are not yet sufficiently advanced to replace the current supervisory reporting system on an EU-wide basis, technological developments (increasingly referred to as regtech and suptech) provide new opportunities to collect, transmit, access, and process large amounts of data more efficiently and effectively. However, new data technologies also place new demands on the design of future supervisory reporting.

    Overall, this fitness check concludes that EU-level supervisory reporting requirements as a whole are broadly effective, highly relevant, and bring EU value added. Nonetheless, a number of issues in the development process, adoption, setup, and implementation of these requirements reduce their efficiency and coherence and impair the quality and usability of the reported data.


    Related Links

    Keywords: Europe, EU, Banking, Insurance, Securities, Reporting, Fitness Check, Call for Evidence, Governance, Data, Regtech, Suptech, EC

    Featured Experts
    Related Articles

    EBA Proposes Standards for IRRBB Reporting Under Basel Framework

    The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.

    January 31, 2023 WebPage Regulatory News

    FED Issues Further Details on Pilot Climate Scenario Analysis Exercise

    The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.

    January 17, 2023 WebPage Regulatory News

    US Agencies Issue Several Regulatory and Reporting Updates

    The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.

    January 04, 2023 WebPage Regulatory News

    ECB Issues Multiple Reports and Regulatory Updates for Banks

    The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.

    January 01, 2023 WebPage Regulatory News

    HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements

    The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.

    December 30, 2022 WebPage Regulatory News

    EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR

    The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.

    December 29, 2022 WebPage Regulatory News

    CBIRC Revises Measures on Corporate Governance Supervision

    The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.

    December 29, 2022 WebPage Regulatory News

    HKMA Publications Address Sustainability Issues in Financial Sector

    The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.

    December 23, 2022 WebPage Regulatory News

    EBA Updates Address Basel and NPL Requirements for Banks

    The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.

    December 22, 2022 WebPage Regulatory News

    ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite

    The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.

    December 22, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8699