ECB Proposes Integrated Reporting Framework to Reduce Burden for Banks
ECB published input of the European System of Central Banks (ESCB) into the EBA feasibility report on reducing the reporting burden for banks in EU. The ESCB report proposes to reduce the reporting burden for banks in the fields of statistical, resolution, and prudential reporting, without losing the information content that is indispensable to monetary policy, resolution, and supervisory tasks. As part of its mandate under the revised Capital Requirements Regulation or CRR2, EBA was required to conduct a feasibility study and requested that input from the ESCB be taken into account. The Supervisory Board of Single Supervisory Mechanism (SSM) was also consulted on this report.
The report identifies the integration of reporting requirements for statistical, resolution, and prudential reporting as the main priority to reduce the reporting burden. The report also identifies a common standard data dictionary and a common data model as the necessary prerequisites to achieve this. This can be achieved through smarter procedures, such as harmonized transmission reporting formats, the removal of duplications, and improved data sharing between authorities. A joint committee needs to be established to lead this work. It should consist of EBA, ESCB, other relevant European and national authorities, and representatives of the banking industry when implementation aspects are discussed. The report recommends the swift development of an informal joint committee to help steer the main issues until a formal joint committee is legislated by the European Parliament and Council. Moreover, the report identifies a central data collection point as a medium-term objective, while enhanced data-sharing arrangements among authorities can already be promoted by the joint committee in the short term.
This report proposes to achieve a fully integrated reporting framework for statistical, prudential and resolution reporting via two parallel intermediate steps: the integration of the data reported for statistical purposes to ESC, and an integrated system for resolution and prudential reporting. These two parallel work streams should converge as soon as possible, with the aim of achieving a full-fledged integrated system in the medium term. Therefore, the joint committee must ensure a strong level of mutual interaction, for example, through the development of a common standard data dictionary and common data model for the statistical, resolution and prudential reporting frameworks. The overall process requires ambitious and strong engagement for full integration from the outset, accompanied by a step-wise plan and a timeline that will inevitably be spread over many years. These efforts should help to reduce the reporting burden for banks and increase the quality of the data received by authorities. As a result, banks would be able to reduce costs, and authorities could better monitor developments in the banking industry.
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Keywords: Europe, EU, Banking, ESCB, CRR2, Reporting, Reporting Burden, SSM, Integrated Reporting System, Basel, Statistical Reporting, Resolution Framework, EBA, ECB
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