European Banking Federation calls for reporting regulation review
The European Banking Federation (EBF) is calling on financial sector authorities in the European Union to create an integrated and standardised framework for data reporting to improve the quality of data while reducing the reporting burden.
According to EBF, data requirements to banks by European and national authorities – such as for example data needed for bank sector stress tests and sector statistics – have “exploded” in recent years.
The federation says banks have invested significantly in systems, in staff and in processes to capture, store, process and report that data. Data sets are becoming increasingly granular and complex while more authorities seek similar data.
This makes it crucial for authorities and the industry to work together to improve the efficiency of reporting.
“The reporting efforts in our sector need to be carefully reviewed, together with the regulators and supervisors. We need to make them as efficient and as clear as possible, so that the right data gets to the right people at the right time,” says Wim Mijs, CEO of EBF.
Key steps to integrated data reporting are aligning the data production methodology; streamlining the reporting processes; and simplifying user/authorities’ requirements.
Defined and reported once
The banking industry’s vision for integrated data reporting is for data to be “defined once” and “reported once”, and for authorities to share that data among themselves in order to minimise the reporting burden for banks.
This means that all concepts and definitions are standardised across the industry, creating public and transparent rules of transformation of granular data points.
It also means that it should avoid duplication of information, meaning that each data point and each template should be reported once.
EBF also says that authorities must enhance their protocols to ease data sharing amongst them. They must enhance their agreements with non-EU authorities to share the granular data from non-EU subsidiaries of EU banking groups.
The banking industry is keen to work with authorities during the early stages of assessing new reporting requirements and when enhancing data management for existing requirements.
EBF says it wants to build on this collaboration to enhance interoperability and harmonisation, avoid overlapping requirements, and design requirements with future regulatory technology in mind.
What to do
The industry calls on authorities to urgently consider two specific measures:
- The European System of Central Banks, with other authorities such as the European Banking Authority and the Single Resolution Board, must commit to maintaining the Banks’ Integrated Reporting Dictionary, known as BIRD, and, if agreed, the Integrated Reporting Framework – for at least ten years.
- European authorities must enhance the governance of supervisory and statistical reporting by banks. They must establish a new governance structure for cooperation and coordination on reporting by banks. This governance structure should assess new data requirements; evaluate potential to reuse or extend existing reporting; harmonise definitions and integrate reporting requirements; and drive development of international reporting standards.
EBF concludes saying that banks in Europe strongly support the creation of a single reporting framework for Europe that allows for the smooth reporting of data across different data domains and across countries.
Banks are committed to working together and to working with central banks, competent authorities and others to create the legislative, regulatory and technological environment that integrated data reporting would need to succeed.