ESCB long-term strategy for banks’ data reporting
The European System of Central Banks (ESCB) and its Statistics Committee (STC) continually strive to increase the efficiency of data collection from banks and to reduce their reporting burden, while continuing to provide policymakers and analysts with high-quality data.
The aim is to, as far as possible, standardise, harmonise 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 organise information stored in their internal systems and fulfil their reporting requirements efficiently.
The IReF is part of the broader ESCB integrated reporting strategy which was published in September 2020 as ESCB input into the European Banking Authority (EBA) feasibility report mandated by the European Parliament and the Council of the European Union.
Eurosystem Integrated Reporting Framework
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 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. To maximise the benefits of integration, the requirements arising from national collection frameworks, for example in the area of balance of payments and financial accounts, are also taken into account. In its initial stage, the IReF will not cover the ECB’s statistical frameworks that do not 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.
This approach aims to ensure proportionality by alleviating the reporting burden for small banks.
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 2018 the Eurosystem, in close cooperation with the banking industry, initiated a cost-benefit analysis, to assess the impact of the IReF. A qualitative stocktaking exercise was conducted from June to October of that year to support the development of scenarios relating to various aspects of data collection and statistical production. Based on the responses to the stocktaking questionnaire, the Eurosystem then developed a baseline scenario for the IReF, which was evaluated by the banking industry and other relevant stakeholders by means of a cost-benefit assessment questionnaire. All euro area countries, plus Sweden, participated in the exercise.
The cost-benefit assessment concluded in April 2021 and demonstrated strong support for the IReF within the banking industry and among other relevant stakeholders. All stakeholder groups indicated that the benefits would outweigh the costs, with 68% of respondents in the banking industry overall and 76% of respondents belonging to cross-border groups confirming that the reduction in reporting costs would outweigh the investment necessary.
A report on the banking industry’s feedback on these high-level considerations and some high-priority technical aspects has now been published. In parallel, the ESCB, in close cooperation with the banking industry, is analysing the responses received on the other aspects and will publish additional focused reports on the outcome of the assessment work in the course of 2022. At the end of that process, the Eurosystem will perform a comprehensive matching of the benefits and costs based on the feedback received from all stakeholders. This will be used as a basis for drafting an ECB Regulation on the IReF, which 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 scope of the IReF. Relevant existing ECB regulations will be repealed or amended, as applicable.
The Eurosystem intends to implement the IReF in a stepwise approach. The organisation of the statistical business processes in the Eurosystem will be designed in 2022, and the IReF is currently expected to go live in 2027.
For additional information on the IReF, an assessment of the high-level results of the cost-benefit assessment questionnaire and the previous documentation, please see the documents below.
- The Eurosystem Integrated Reporting Framework: an overview, December 2021
- Cost-benefit assessment – High-level considerations and high-priority technical aspects, December 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
- Draft reporting scheme for deposit-taking corporations on the Integrated Reporting Framework, March 2021
The IReF replaced the European Reporting Framework:
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 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.