Making banks’ data reporting more efficient
We work with the national central banks (NCBs) in the EU to provide policymakers and analysts with the high-quality data they need. At the same time, we are constantly seeking to make data collection more efficient and reduce the reporting burden on banks.
We aim to harmonise, standardise and integrate the existing statistical requirements of the European System of Central Banks (ESCB) applicable to banks across statistical domains and countries. This helps automate data processing and enhances data quality.
This approach is built on three pillars:
- cooperating with other European and national authorities to integrate statistical and prudential reporting under the future Joint Bank Reporting Committee (JBRC);
- incorporating existing statistical reporting into the Integrated Reporting Framework (IReF) as a first step towards broader integration;
- cooperating with the banking industry to develop a unified approach through the Banks’ Integrated Reporting Dictionary (BIRD), which makes it easier for banks to extract information from their internal systems in a uniform way so they can meet their reporting requirements more efficiently.
Integrating statistical and prudential reporting
Our strategy for improving and simplifying reporting requirements is outlined in a report produced by the ESCB to provide input into the European Banking Authority (EBA) feasibility study on an integrated reporting system. The strategy’s main objective is to avoid duplication and to standardise the descriptions of the concepts used. This should, in turn, reduce the reporting burden for banks and improve the quality of the data received.
We are currently working with the EBA, the Single Resolution Board and the European Commission to achieve these goals. This cooperation will be formalised through the creation of the JBRC, which will also include relevant national authorities and representatives of the banking industry. The Committee, which should be up and running in the course of 2024, will advise on how best to integrate statistical, resolution and prudential data reporting. It will also steer the data sharing process and consult the banking industry on technical matters.
Integrated Reporting Framework
The Integrated Reporting Framework (IReF) will integrate the Eurosystem’s statistical requirements for banks. It will be applicable across the euro area and 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 NCBs will also be 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 IReF?
Integrating existing statistical requirements into IReF will help banks by standardising reporting obligations, reducing redundancies and overlaps, minimising the reporting burden and enhancing data quality. IReF will also help automate data processing while minimising the cost of any further changes to the data collected. The framework will particularly benefit banks operating in multiple countries, as the integrated requirements will enable consistent and standardised reporting across borders. Statistical compilers and other users will also benefit, as integration will make it easier to compare data across countries, as well as improving data quality and data collection. In addition, it will help enable agile policymaking and analysis by reducing time to market.
What stage is the programme currently at?
In November 2020 the ESCB launched a cost-benefit assessment to evaluate the impact of IReF, in collaboration with the banking industry. All euro area countries, along with Sweden, participated in the exercise. The assessment was completed 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 more than make up for the investment required. The ECB published a high-level report in December 2021 before further releasing three, more detailed reports in September 2022.
The ESCB, together with all other stakeholders, launched a complementary cost-benefit assessment (complementary CBA) in May 2023, aimed at clarifying additional topics relating to IReF. The first report on the complementary CBA was published in February 2024. It assesses to which the extent to which country-specific statistical reporting requirements could be usefully included in the ECB IReF Regulation.
Two further reports with the results from the analysis of the other topics covered in the complementary CBA are expected to be published by the end of March 2024.
Following the complementary CBA, the Eurosystem will draft an ECB Regulation on IReF. The draft IReF Regulation will be subject to a public consultation before it is finalised and adopted. Existing ECB regulations containing statistical requirements that will be included in the IReF Regulation will be repealed or amended.
The Eurosystem Integrated Reporting Framework – an overview, February 2024
Documents on the cost-benefit assessment:
BIRD (Banks’ Integrated Reporting Dictionary) is a voluntary collaborative initiative bringing together central banks of the European System of Central Banks and commercial banks. BIRD – which can be accessed free of charge – helps banks to generate statistical, supervisory and resolution-related reporting output that complies with the reporting requirements set out in European legislation. BIRD is an integrated dictionary with redundancy-free content: the concepts underlying reporting obligations are all identified and described once, helping banks to decide which data to extract from their internal systems and how to process them.
One of BIRD’s first deliverables will involve helping banks to comply with the Integrated Reporting Framework (IReF) – a new data collection framework that will apply consistently across all euro area countries. Reporting agents will be able to use BIRD for IReF reporting, as well as other reporting obligations. BIRD will help to reduce banks’ reporting burden and improve the quality of the data reported to the various authorities.