Standardising banks’ data reporting
Complementary cost-benefit assessment
Between 5 May 2023 and 31 July 2023, the ECB will be conducting a complementary cost-benefit assessment (cCBA) for the implementation of IReF. As part of this new assessment, the banking industry and other stakeholders are invited to provide their evaluation of the costs and benefits of several proposals for the reporting under IReF. Further information on the cCBA is available on the dedicated consultation page.
The European System of Central Banks (ESCB) and its Statistics Committee (STC) provide policymakers and analysts with the high-quality data that they need. At the same time, they are constantly working to make their data collection more efficient and to reduce banks’ reporting burdens.
Wherever possible, the aim is to harmonise, standardise and integrate existing ESCB requirements for collecting statistical information from banks across statistical domains and countries. This will help automate data processing and enhance data quality.
The approach builds on three pillars:
- cooperation with other European authorities to integrate statistical and prudential reporting under the future Joint Bank Reporting Committee;
- the Integrated Reporting Framework (IReF) to integrate existing statistical reporting as a first step towards broader integration;
- cooperation with the banking industry to develop a unified approach through the Banks’ Integrated Reporting Dictionary (BIRD), which supports banks in reducing their efforts to correctly and uniformly extract information stored in their internal systems, such that they can fulfil their reporting requirements more efficiently.
Integrating statistical and prudential reporting
The broader framework for improving and simplifying reporting requirements is the ESCB integrated reporting strategy. This strategy was outlined in the ESCB’s input to a European Banking Authority (EBA) feasibility study on an integrated reporting system, which was published in 2021. The aim of this process is to avoid duplication, standardise concepts and finally reduce the reporting burden for banks.
To facilitate the development of this strategy, the ECB is actively participating in an informal coordination group on the semantic and syntactic integration of reporting, alongside the EBA, the Single Resolution Board and the European Commission. It has also proposed the establishment of a Joint Bank Reporting Committee (JBRC). The JBRC should comprise representatives from the relevant European and national authorities and involve the banking industry in a permanent way. The committee should advise on how to best integrate statistical, resolution and prudential data reporting and to steer the data sharing process. Authorities collaborate actively to set it up in the course of 2023.
ECB and EBA Workshop with the banking industry on the way forward towards integrated reporting, December 2022
EBA feasibility study on an integrated reporting system, December 2021
ESCB input into the EBA feasibility study, September 2020
Integrated Reporting Framework
The Integrated Reporting Framework (IReF) will integrate the Eurosystem’s statistical requirements for banks into a single standardised reporting framework applicable across the euro area. It may also be adopted by authorities in other EU Member States.
IReF focuses mainly on the ECB’s requirements in terms of 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, any relevant reporting obligations from national collection frameworks used by national central banks are also taken into account. In its initial stage, IReF will only cover ECB statistical frameworks that directly relate to banks’ balance sheet assets and liabilities. It will not, for example, cover ECB requirements relating to payments or money market statistics. IReF is also designed to ensure proportionality by limiting the reporting obligations for small banks.
The ECB announced the design phase of the IReF programme in a press release in December 2021. The programme is expected to go live in 2027.
What are the advantages of the Integrated Reporting Framework?
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. IReF will also help with data processing automation while minimising the cost of any further changes to the data collected. The framework will be of particular benefit to banks operating in multiple countries given that the integrated requirements will facilitate consistent and standardised reporting across borders. Statistical compilers and other users will also benefit from the integration since 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 programme?
In November 2020 the ESCB initiated a cost-benefit assessment, in cooperation with the banking industry, to evaluate the impact of IReF. All euro area countries, as well as Sweden, participated in the exercise. The assessment came to an end in April 2021 and confirmed strong support for IReF within the banking industry and among stakeholders, with a large majority of banks confirming that the reduction in reporting costs would outweigh the investment required.
A report summarising high-level considerations and some high-priority technical aspects was published in December 2021 by the ECB, which subsequently published three more detailed reports in September 2022 that focused on different elements of the IReF programme.
The ESCB, together with all other stakeholders, launched a complementary cost-benefit assessment (cCBA) in May 2023 aimed at clarifying additional topics relating to IReF. After analysing the benefits and costs based on the feedback received from 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 finalised and adopted. The regulation will then replace the existing legal provisions on the collection of datasets within IReF, and the relevant existing ECB regulations will be repealed or amended, as applicable.
Results of the IReF cost-benefit assessment and status update on the programme, November 2022
Q&A with the banking industry on the IReF cost-benefit assessment, November 2022
The Eurosystem Integrated Reporting Framework: an overview, May 2023
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 Banks’ Integrated Reporting Dictionary (BIRD) is a cooperative effort between industry and authorities to understand how the reporting burden can be minimised and, in parallel, to increase the data quality reported to authorities.
The ECB, other European authorities, the European Banking Federation, several national central banks and many commercial banks are cooperating closely to develop and maintain BIRD. BIRD is a “public good” and therefore freely available to all interested parties, such as banks, consultancies and software vendors developing application packages for financial reporting. Considering the voluntary nature of BIRD, its adoption is free for the industry as is the use of any of its components.
What can banks expect?
BIRD offers cooperative interpretation and transposition of the regulatory reporting requirements at an operational level. It also allows for an open discussion between all stakeholders about how reporting requirements can best be met in order to achieve the “Define Once” principle and how to derive various reporting requirements from a single source. With the cooperative interpretation and transposition of the regulatory reporting requirements, BIRD reduces banks’ reporting burdens and improves the quality of the data reported to the authorities.
How can the Banks’ Integrated Reporting Dictionary and the Integrated Reporting Framework benefit from one another?
BIRD is designed to support banks in generating statistical and supervisory reporting outputs which are free of redundancies and compliant with the reporting requirements of European legal acts. Under the current approach, national central banks collect the relevant statistical information under their national statistical reporting frameworks, which may vary across countries. Consequently, country-specific adjustments are required to implement BIRD at the national level. IReF will introduce a common layer for the collection of statistical data from banks, allowing for BIRD to be applied in a consistent way across euro area countries. Reporting agents will then be able to directly understand and use BIRD for statistical reporting without the need to make national adjustments. Ultimately, this will help to reduce banks’ reporting burdens and improve the quality of the data reported to the authorities.Discover more on the BIRD project