Standardising banks’ data reporting (IReF & BIRD)
The European System of Central Banks (ESCB) and its Statistics Committee (STC) are constantly working to make their data collection more efficient and to reduce the reporting burden on banks, while also providing policymakers and analysts with the high-quality data that they need.
Wherever possible, the aim is to harmonise, standardise and integrate existing ESCB requirements for collecting statistical information from banks across domains and countries. This will help automate data processing and enhance data quality.
This approach consists of two elements:
- the Integrated Reporting Framework (IReF), which seeks to integrate the Eurosystem’s statistical reporting requirements for banks;
- the Banks’ Integrated Reporting Dictionary (BIRD), which helps banks to correctly and uniformly extract information stored in their internal systems in order to fulfil their reporting requirements efficiently.
Integrated Reporting Framework (IReF)
What is the IReF’s objective?
The aim of the IReF project is to integrate the Eurosystem’s statistical requirements for banks into a single standardised reporting framework that would be applicable across the euro area and that might also be adopted by authorities in other EU Member States.
The IReF focuses mainly on the ECB’s requirements relating to banks’ balance sheet and interest rate statistics, securities holdings statistics and granular credit data. Data collection and transformation processes will also be standardised across countries. To maximise the benefits of integration, reporting obligations from national collection frameworks are also taken into account, to the extent they are used by national central banks. In its initial stage, the IReF will only cover the ECB’s statistical frameworks that relate directly to banks’ balance sheet assets and liabilities. For example, it will not cover the ECB’s requirements relating to payments or money market statistics. The IReF also aims to ensure proportionality by limiting reporting obligations for small banks.
The IReF is part of the broader ESCB integrated reporting strategy published in September 2020 as the ESCB’s input into the European Banking Authority (EBA) feasibility study on an integrated reporting system. The EBA study was mandated by the European Parliament and the Council of the European Union and was published in December 2021.
The ESCB’s input into the EBA feasibility study, September 2020.
The EBA feasibility study on an integrated reporting system, December 2021.
Beyond developing the IReF, the ECB is actively working to set up a joint reporting committee, which will comprise representatives from relevant European and national authorities and will involve the banking industry in certain tasks. The joint reporting committee will advise on how best to integrate statistical, resolution and prudential data reporting. It could also steer the process of data sharing and help ensure the IReF’s operability among the relevant national and European authorities. Since formally establishing such a committee in legislation takes some time, the ECB, the European Commission, the EBA and the Single Resolution Board have set up an informal coordination group to ensure that cooperation on an integrated reporting system progresses in the meantime.
What are the advantages of the IReF?
Integrating existing statistical requirements into the IReF will help banks with their data reporting, by standardising their reporting obligations, reducing redundancies and overlaps, minimising the reporting burden and enhancing data quality. The IReF will also help automate data processing and minimise the cost of any further changes. Banks operating in several countries will particularly benefit, as the integrated requirements will facilitate consistent and standardised reporting across borders. Statistical compilers and other users will also benefit from the integration, as it will enhance the cross-country comparability of data, improve data quality and data collection, and reduce the time to market required for agile policymaking and analysis.
What is the current status of the project?
In November 2020 the ESCB, in cooperation with the banking industry, initiated a cost-benefit assessment to evaluate the impact of the IReF. All euro area countries, plus Sweden, participated in the exercise. The assessment came to an end in April 2021 and demonstrated the strong support for the IReF within the banking industry and among stakeholders, with a large majority of banks confirming that the reduction of reporting costs would outweigh the investment necessary.
A report summarising high-level considerations and some high-priority technical aspects was published in December 2021. Three more detailed reports focusing on different elements of the project were published in September 2022.
The ESCB, together with all stakeholders concerned, is currently developing a complementary cost-benefit assessment aimed at clarifying additional topics relating to the IReF. The assessment will be launched by early 2023. After analysing the benefits and costs based on the feedback received from all stakeholders, the Eurosystem will draft an ECB regulation on the IReF. This draft regulation will be subject to a public consultation – currently planned for 2024 – before it is adopted. The regulation will replace the existing legal provisions on the collection of datasets within the IReF, and relevant existing ECB regulations will be repealed or amended as applicable. The IReF is currently expected to go live in 2027.
For additional information on the IReF, an analysis of the results of the cost-benefit assessment and the previous documentation, please see below.
- The Eurosystem Integrated Reporting Framework: an overview, September 2022.
- Cost-benefit assessment: content-related topics and technical aspects, September 2022.
- Cost-benefit assessment: the technical integration of country-specific requirements, September 2022.
- Cost-benefit assessment: reporting schedules, revision policy, approach to derogations and implementation aspects, September 2022.
- Cost-benefit assessment: high-level considerations and high-priority technical aspects, December 2021.
- Draft reporting scheme for deposit-taking corporations on the Integrated Reporting Framework, March 2021.
- Cost-benefit assessment questionnaire on the Integrated Reporting Framework for the banking industry, November 2020.
- Annex 1 to the cost-benefit assessment questionnaire on the Integrated Reporting Framework, November 2020.
Banks’ Integrated Reporting Dictionary
The BIRD is an integrated reporting dictionary which provides banks with up-to-date reference material to help them produce statistical and supervisory reports.
The BIRD was developed by the ESCB and the banking industry. Its documentation is freely available to all interested parties, who can decide whether or not to participate in the initiative.
BIRD – Making reporting better
Helping banks produce statistical and supervisory reportsWhat is the BIRD?
What can banks expect?
The BIRD provides a precise description of the data that banks should extract from their internal systems to generate reports. It also sets out clear rules for transforming these data so that they comply with reporting requirements. The aim is to alleviate banks’ reporting burden and improve the quality of data reported to authorities.
How is the BIRD governed?
BIRD activities are carried out by an Expert Group comprising the ECB, various national central banks and commercial banks. The group’s work is coordinated by the ECB.
These experts analyse reporting requirements for banks and determine the data and related transformation rules needed for these requirements to be met. This work would otherwise need to be completed by each individual reporting bank. This helps ensure that the data banks report to authorities are comparable, consistent and compliant with the requirements.
In addition, the BIRD Steering Group discusses and decides at least once a year on a roadmap for the next two years. This reflects new areas to be covered and important projects to be rolled out, such as data modelling or improving the BIRD’s usability. The Steering Group is composed of senior representatives from participating institutions.
How can the BIRD benefit from the IReF?
The BIRD is designed to generate outputs that are compliant with the requirements of European legal acts. However, national central banks may collect the necessary statistical information as part of their national statistical reporting frameworks. As these frameworks vary across countries, major country-specific adjustments would currently be required to implement the BIRD at the national level.
The IReF will support the BIRD by establishing a common collection layer for statistical data from banks across euro area countries. Reporting agents will thus be able to directly use the BIRD for statistical reporting without national adjustments.