ESCB long-term strategy for banks’ data reporting
The long-term approach of the European System of Central Banks (ESCB) and its Statistics Committee (STC) to data collection from banks aims at standardising and integrating the existing ESCB statistical frameworks, as far as possible, across domains and countries.
The main objective of the ESCB’s long-term approach is increasing the efficiency of the reporting and reducing the burden for banks, while continuing to provide users with high quality data. Such an approach would rely on a greater clarity on concepts and definitions as well as on the requirements, thereby facilitating the automation of data processing and enhancing data quality. The first pillar of such a strategic approach is the ESCB Integrated Reporting Framework (IReF), which is intended to integrate banks’ statistical reporting requirements. The second pillar is the Banks’ Integrated Reporting Dictionary (BIRD), which aims at supporting reporting agents in optimising the organisation of the information stored in their internal systems to fulfil reporting requirements.
This strategy benefits from the previous work of the ESCB, which focused on bridging the reporting frameworks of the ECB and the European Banking Authority (EBA) from a methodological perspective.
The Banks’ Integrated Reporting Dictionary – BIRD
Facilitating the production of banks’ statistical reports.
The pilot phase of the BIRD has been completed and the relevant documentation is now available at www.banks-integrated-reporting-dictionary.eu
The BIRD is a joint endeavour of the ESCB and the banking industry providing banks with up-to-date reference material to facilitate the production of statistical and supervisory reports. This initiative was launched in 2015 with the objective of alleviating the reporting burden on banks and improving the quality of data reported to authorities.
The BIRD documentation is available as a public good to all interested parties, who may decide whether to apply it.
What can banks expect?
Support in the development and maintenance of the banks’ reporting to authorities through:
- a precise description of the data that must be extracted from their internal systems to generate reports;
- clearly defined rules for transforming these data in order to comply with reporting requirements.
How does BIRD work?
BIRD activities are carried out by a group of experts from various national central banks and commercial banks, whose work is coordinated by the ECB.
These experts analyse reporting requirements addressed to banks and define the data and related transformation rules required to meet them – a task which would otherwise need to be completed individually by every reporting bank. This, in turn, helps ensure that data reported by banks to authorities are comparable, consistent and comply with the requirements.
BIRD’s status and how it relates to the ESCB IReF
At this stage, the BIRD covers the requirements of AnaCredit and Securities Holding Statistics, while its coverage of FinRep is under development. Banks contribute to the project on a voluntary basis; in addition, banks can adopt the BIRD, or not.
In the longer run, should the IReF (see below) be implemented, the BIRD will be linked to the integrated data collection rather than to several distinct sets of reporting requirements. This would further increase the effectiveness of the approach.
The ESCB Integrated Reporting Framework (IReF)
Reporting obligations for banks have grown significantly and are becoming increasingly more granular and complex. The methodologies underlying the data collections are not fully harmonised and the resulting datasets are not free from redundancies, overlaps and inconsistencies. In addition, different countries within the European Union have different approaches towards the collection of reporting data.
What is the objective of the IReF?
The IReF aims at integrating the existing ESCB statistical data requirements related to banks, as far as possible, into a unique and standardised reporting framework that would be applicable across the euro area and might also be adopted by other European countries. The main focus of the project is on the requirements of the ECB regulations on balance sheet items (BSI) and interest rates (MIR) statistics of monetary financial institutions (MFIs), the securities holdings statistics (SHS) of MFIs, and granular credit and credit risk data (AnaCredit). ECB statistical frameworks that do not directly relate to banks’ balance sheet assets and liabilities – e.g. the ECB requirements in the area of payments or money market statistics – do not currently fall within the initial scope of the exercise.
The approach is designed to ensure proportionality through a derogation scheme to alleviate the burden for small reporting agents.
What are the advantages of the IReF?
The integration of the existing statistical requirements is expected to facilitate reporting by banks, reduce redundancies and minimise the reporting burden, as well as enhancing data quality. Cross-country standardisation of the reports may bring additional benefits, especially for banks with reporting obligations in different countries. Statistical compilers and users may also benefit from dealing with fully consistent and standardised reporting.
What is the current status of the project?
The ESCB has initiated a cost-benefit analysis to assess the impact of the IReF on the supply and demand sides, in close cooperation with the banking industry. In 2018, as a first step, the ESCB will issue a qualitative stock-taking questionnaire to help develop valid scenarios for the design of the IReF as regards various data collection and statistical production aspects. This will be followed by a cost-benefit assessment questionnaire to identify the optimal scenario for the banking industry and the ESCB.
The cost-benefit analysis focuses on the statistical requirements that are within the scope of the IReF. References to supervisory reporting requirements may be included in the questionnaire to assess the overall feasibility and relevance of the IReF for the stakeholders.
The ESCB is provisionally envisaging the implementation of the IReF in 2024-27; however this will be subject to a review in the light of the results of the cost-benefit analysis.
For additional key facts and information on the IReF and how it relates to the BIRD, see the overview file below.
The ESCB Integrated Reporting Framework: an overview, April 2018.