What is the BIRD?
The Banks’ Integrated Reporting Dictionary (BIRD) aims to foster cooperation in the field of regulatory reporting, alleviate the reporting burden for banks and improve the quality of data reported to the authorities.
The contents of the BIRD are based on a harmonised data model that specifies the data which should be extracted from the banks’ internal IT systems to generate the reports required by authorities. In addition, there are clearly defined transformation rules to be applied to the data extracted from the banks’ internal IT systems in order to produce a specific final regulatory figure. The BIRD consists of the Input Layer – the univocal categories of data to be extracted from the banks’ internal IT systems and the transformation rules.
The BIRD database and technical guidelines are freely available for download. A more detailed introduction to the BIRD methodology, as well as an overview of the BIRD member organisations, can also be found on the following pages:BIRD Methodology BIRD Expert Group and Steering Group Call for expression of interest
Why is the BIRD useful?
Whenever a new statistical or supervisory regulatory framework is introduced or an existing one is updated, banks are expected to independently interpret the framework, extract data from their internal systems and then transform the data to obtain the final figure required by the regulation. However, it is not always easy for banks to determine which source data to use and how to correctly process it.
Differences in how banks interpret specific regulations can have a negative impact on the quality of their output data and make it more difficult to compare different banks’ data. It is also costly and time-consuming for each bank to study new or revised legal acts separately, therefore cooperation between banks can bring significant efficiency gains.
How can banks use the BIRD?
The purpose of the BIRD is to provide a service to the banks. The BIRD is a “public good” and therefore freely available as to banks and all interested parties, such as software houses that develop application packages for financial reporting. The adoption of the BIRD by banks is completely voluntary. It can be used to obtain additional documentation (related to regulations and guidelines) or as an “active dictionary” for procedures developed by banks.
The BIRD represents an “input approach” because it is not limited to the regulatory requirements. It also covers the data stored in banks’ internal reporting systems, although the banks remain responsible for how their systems are organised.
Figure 1: Input Layer (harmonised data model) + Transformation rules
What doesn’t the BIRD provide?
The BIRD is not an IT tool and the initiative does not seek to provide such a tool. The BIRD does not make any changes to the banks’ internal IT systems and it does not cover the mappings of the data from the banks’ internal IT systems to the Input Layer.
The BIRD is not a regulatory act and it is not a new rule. It is a transposition of the legal requirements at a more operational level. In other words, the BIRD provides an example of how the requirements set out in reporting regulations may be met.
How will the BIRD benefit European banks?
There are a number of advantages for banks:
- Different reports can be produced from a single input layer by applying harmonised algorithms. This reduces the reporting burden for the banks, improves the consistency and quality of their data and removes the need for them to manage each mandatory data collection separately.
- There are well-defined transformation rules, which include the calculations used to obtain certain regulatory figures. These provide a univocal interpretation of regulations and greater clarity, while also increasing compliance with the regulatory requirements.
- Less time and effort is needed to analyse and comply with new reporting requirements, which increases efficiency and reduces costs.
- The banks develop a better understanding of and a greater interest in what the data include and how they are produced. This means that the banks can manage and use their data more effectively.
Which statistical and supervisory regulatory frameworks are (or will be) covered by the BIRD?
The aim is for a number of statistical and supervisory reporting requirements to be covered by the BIRD, including:
- The ECB’s collection of granular credit and credit risk data (AnaCredit);
- The ECB’s Securities Holdings Statistics (SHS);
- The ECB’s Monetary Financial Institutions’ Balance Sheet Items (BSI) Statistics;
- The ECB’s Monetary Financial Institutions’ Interest Rate (MIR) Statistics;
- The balance of payments and national accounts;
- The additional requirements under the Single Supervisory Mechanism;
- The EBA’s Implementing Technical Standards (ITS), including Common Reporting (COREP) and Financial Reporting (FINREP)
Cooperation between the authorities and banks
The ECB, the national central banks (NCBs) and a number of participating commercial banks work closely together to develop and maintain the BIRD. The involvement of commercial banks is crucial to ensuring that the BIRD documentation is correct and useful. Moreover, it is in the interest of all participants that the banks’ information systems are organised appropriately, as this allows timely, consistent and high-quality data to be produced.
In 2013 the Statistics Committee (STC) of the European System of Central Banks began investigating the possibility of promoting an integrated approach to supervisory and statistical data.
In 2014 an STC task force recommended developing, in close collaboration with the banking industry, a European “input approach” model which would provide a standardised design of the banks’ internal data warehouses to support the process of reporting data to the authorities.
The outcome of an ECB workshop with the banking industry in 2015 was that the best way to launch the BIRD would be to first implement the new requirements related to the collection of granular credit and credit risk data (AnaCredit), as defined in Regulation (EU) 2016/867, and to statistics on holdings of securities (SHS), as defined in Regulation (EU) No 1011/2012.
Given the limited time that was available to implement the AnaCredit and SHS requirements, in 2015 the STC decided to launch a BIRD pilot for these two types of statistics. This pilot involved a number of volunteer NCBs together with banks contacted by each participating NCB.
The BIRD pilot was successfully concluded in April 2017 with the publication of comprehensive and detailed documentation describing (in a formal language) how the requirements for banks with regard to the ECB Regulations on AnaCredit and SHS (for banking groups) can be met using data from the banks’ internal systems. The documentation is freely available to banks and all interested parties.
Following the success of the BIRD pilot, in June 2018 the European Banking Authority’s ITS regarding FINREP were also incorporated into the BIRD.
The Banks’ Integrated Reporting Dictionary (BIRD) is a collaborative project between central banks of the European System of Central Banks and commercial banks. The aim of the dictionary is to support reporting agents in preparing datasets for transmission under the respective reporting frameworks to which they are subject.
The BIRD is made available for public purposes only. It does not constitute any type of professional advice to users, nor any official interpretation of any reporting requirement. The information it provides must not be understood as binding, or otherwise legally relevant concerning compliance with reporting obligations. The BIRD does not affect, amend or replace the responsibilities of reporting agents towards the authorities to which they provide statistical information. Reporting agents remain fully responsible for organising their internal reporting systems and ensuring the correctness of their reports to the authorities.
The project sponsors shall not be liable for any gap, error or inaccuracy in the content of BIRD, or for any action taken in reliance thereon including, without limitation, any reference made in contractual agreements. They expressly disclaim all warranties, expressed or implied, as to the accuracy of any of the content provided or as to the merchantability or fitness of the content provided in the BIRD.
The project sponsors do not endorse, or take responsibility for any replication of the content of BIRD, or any other form of redistribution.
BIRD users may make free use of the information obtained directly from it. The original content of BIRD cannot be changed, however the content may be used for the creation of new products and the commercial use thereof. Whenever re-using the content of BIRD for the creation of a new product the source ‘BIRD’ must be quoted correctly. Where the information is incorporated in documents that are sold (regardless of the medium), the natural or legal person selling the information must inform buyers, both before they pay any subscription or fee and each time they access the information taken from this website, that the information may be obtained free of charge through the BIRD website.