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    ECB Further Reviews Costs and Benefits Associated with IReF

    September 15, 2022

    The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states. Subject to the adoption of the IReF Regulation by the Governing Council in 2025, the IReF is expected to go live in 2027. ECB has now published three detailed reports, based on the feedback received from the banking industry during the cost-benefit assessment, with the reports focusing on certain technical aspects, reporting schedules, and technical integration of country-specific requirements.

    The report on content-related topics and technical aspects notes that the banking industry supports the use of a highly normalized entity relationship model for the representation of IReF requirements. The preferred approach for IReF technical implementation would be to use an entity relationship model with a lower level of normalization. Overall, the collection of complementary attributes to document cases where a value is not applicable or not required (“null explanatory values”) is seen as beneficial. With regard to the IReF features arising from the integration of existing requirements, the collection of granular data on securities issued as a debtor was supported, collecting instrument level data on intra-group positions was deemed feasible, and the feedback received from the banking industry supports aggregated data collection for holdings and issuance of other equity; however, an alignment of the requirements with the data collection for unlisted and non-ISIN securities is still considered useful. New variables may be considered instrumental in simplifying IReF reporting. In addition, country-specific requirements that are common across the euro area may be integrated into the common IReF reporting scheme. Therefore, a cost-benefit assessment will be initiated by early 2023, focusing on selected topics where further investigation is deemed to be beneficial.

    The report on reporting schedules, revision policy, approach to derogations, and implementation aspects notes that, with respect to the revision policy, the banking industry expressed a preference for a short revision time window. With respect to the reporting schedule, the analyses identified various variables and measures whose timeline can be either relaxed or brought forward in the IReF reporting scheme; advantages in aligning the reporting schedules of the quarterly transmission with FINREP; and the proposed transmission of certain attributes that do not refer to a reporting period before the start of the official reporting cycles was not supported by the banking industry. For aspects relating to the implementation of the IReF, a short phase of parallel reporting of up to six months during the IReF implementation period was supported by the banking industry. Strong support was found for sharing validation rules and plausibility checks with reporting agents. With regard to the revision policy, the banking industry expressed a preference for a short revision time window.

    The report on technical integration of country-specific requirements develops a framework to conceptualize country-specific requirements and describes the logic for establishing the IReF extended technical layer. It describes how the IReF extended technical layer can be translated into actual reporting requirements based on feedback received from the banking industry. The report looks at how the IReF extended technical layer can be used to define the reporting scheme applicable at the national level and whether discretion can be provided to reporting agents to adapt their reporting to the extent that it fulfils all the reporting obligations they are subject to, both under the IReF Regulation and under the national legislation. It is envisaged that this standardized layer, referred to as the IReF extended technical layer, will consist of a logical data model to represent the requirements that would cover and display in a logical way business aspects, interdependencies, and constraints affecting the requirements; it will also consist of an implementation model for the data to be reported by banks (whether arising from the IReF Regulation or country-specific).

     

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    Keywords: Europe, EU, Banking, Reporting, Basel, IReF, Statistical Reporting, Granular Reporting, National Reporting, Regtech, Suptech, ECB

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