Response to discussion on a Feasibility Study of an Integrated Reporting System under Article 430c CRR

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1) Please explain which institutions you think should be considered by the Feasibility Study.

A revision of the reporting system can only be beneficial if all reports are taken into account. This relates to statistical reporting, regulatory reporting and reporting to resolution authorities and deposit guarantee institutions (the latter two are not relevant for many EAPB members). In the end only in this way simplifications and reductions in cost can be achieved. Therefore, all relevant stakeholders must be taken into account in a feasibility study, i.e. both the reporting authorities and the reporting institutions.

9) What are the characteristics you think a data dictionary should have? Do you agree with the one referred to in this document? Do you think any characteristic is missing or should not be included?

A robust and well-defined data model for all reporting areas is the key to a future-oriented new reporting format. Approaches that are already well advanced in development, such as BIRD, should definitely be included in the development. The data dictionary should be structured in such a way that a transaction with all its components only needs to be reported once in order to fulfill all reporting requirements.

12) How important is it for institutions to have a unique and standard data dictionary for all regulatory data with the aim of ensuring consistent use across the supervisory, resolution and statistical reporting?

Highly important

13) How much would it cost to move to a unique regulatory data dictionary?

Highly costly

14) How much cost reduction is expected by integrating the national regulatory reporting together with the harmonised reporting regulation into a unique data dictionary?

High cost reductions

15) How much cost reduction is expected by integrating ad hoc regulatory reporting with harmonised regulation into a unique data dictionary?

High cost reductions

Feasable and preferable

option 2

20) In case of Option 2, please specify how should the granular collection layer be designed to your best advantage (and benefit of reporting more granularly)?

Regarding the granularity of the data to be reported, reporting at the individual transaction level must be intended. If aggregations and evaluations are carried out at the reporting recipients on the reported data, the rules used for this must be transparent and traceable for the reporting institution. Furthermore, it should be possible for the reporting party to get access to these results. In the end, only the reporting institution can be responsible for e.g. calculated capital ratios. Due to this initial situation, only option 2 (page 78 of the Discussion Paper) can be the preferred way of implementation, with the reduction of the volume of data to be reported being a key objective.

23) If transformations are to be defined (as depicted in Option 2 or Option 3), who should be responsible for their definition (e.g. who takes responsibility for their correctness) and their execution?

Authorities and reporting institutions jointly

Manual adjustments

Definition of appropriate rules.

Consolidated/individual figures

Data collection on prudential, statistical and resolution legislation should be aligned; supervisory scope should change.

Different valuations

Valuation methods, for example, fair value, amortized costs etc. should be harmonized; unique valuation method.

Principle-based rules

Rules across the entire EU should be harmonized.

Legal aspects

Alignment across the entire EU, like legislation on confidentiality and data privacy, etc.

Legal aspects should be treated at national level and taken into account at European level definitions.

29) Is your institution reporting to different authorities in your home country?

Yes

30) Is your institution reporting to other authorities in host countries?

Yes

Please comment: What problems arise from reporting to different authorities?

The majority of the institutions report to different authorities in their countries.

Problems that arise from reporting to different authorities:
- Differences in: (data) delivery models, accounting rules, definitions, consolidation aspects, technical formats, reporting timelines and frequencies;
- Overlapping data requests;
- Local differences in terms of regulation;
- Mix of aggregated and granular data;

31) Are you using one or more data dictionaries for reporting? How?

Multiple dictionaries

Please comment: how are you making use of them?

Because of differences in primary reporting definition as well as in the technical input layer across EU countries, institutions are consequently using a different semantic and syntactic data definition and a different semantic and syntactic definition for the data collection.

In other cases, dictionaries differ country by country or by reporting framework. Some are using an internal data dictionary, while some other banks are using one conceptual data dictionary with more technical implementations. That’s why, each system has its own implementation.

32) Are you using the same or different formats for prudential/resolution reporting and for statistical reporting?

Different formats

33) How important would it be, for your institution, to have access to a CDCP for all prudential, resolution and statistical reports? Why?

Very important

34) What should be, in your view, the main characteristics of a CDCP?

- One dictionary for all data collections, without any regard to the final purpose, who the requesting authority is, and what the national vs EU nature of the request is.
- Only one collection layer, no existence of multiple reporting layers.
- Proper governance should be established, in order to reuse and share already existing data.
- Standardized transformation rules deriving regulatory data/templates.
- In order to protect sensible data from EU and other countries, encryption facilities should be available.
- For all types of reports and in all jurisdictions, the interfaces for data collection should be consistent.
- Uniform protocols and formats should be used for data exchange between the institutions and the authorities.
- Common roles and access control rules.
- Data quality should be assured through quality controls and control framework.
- Clearly defined Data Dictionary covering the data definitions; principles and rules of data quality management;
- Complex data transformation should be avoided.

Please answer here to question 36

Following aspects should be taken into account to reduce the costs:

- A commonly used single granular data model in the European banking industry is essential to reduce the costs of reporting.

- To the reporting institutions both the proposed "centralized system" (5.2.10) and "distributed system" (5.2.11) are beneficial in a same manner, but we consider that the centralized system would produce a lower TCO. Furthermore, if the "distributed system" allows for national divergence of data requirements, this alternative will be significantly worse than the centralized system for the reporting institutions.

37) Would the industry be prepared to bear the costs of integrated reporting?

Yes, to a limited extent

39) On a best effort basis, please include any monetary cost estimate you may be able to provide (% of operational costs) related to the implementation of an integrated reporting system for your institution.

The estimation of costs is bank-specific and requires a detailed analysis. Moreover, it depends on the scenario (full integration to optimizing current DPM), the granularity of reporting frameworks and transformation aspects. Because of theses unknowns we are not able to provide a figure.

40) Would you prefer the future integrated reporting system to be based on:

A push approach

Please include any other comment to question 40

With regard to the organization of future reports, an institute should only have to deliver a report to one central office and only clarify any data quality problems that arise with this office (single point of contact). Since the responsibility for the correctness of the data lies with the supplying institute, the push model seems to be the only possible solution in terms of architecture.

44) Please specify how the agile coordination mechanism for coordination of data requests could be further simplified and how your proposed measures could enhance coordination and avoid data duplication?

We agree with the EBA-description of the ‘Agile Coordination Mechanism’, because it represents a simple and efficient way to manage a better governance of new data requests and to make use of the capabilities of the CDCP and the common data dictionary. For example, since the objective of the data request can differ, it could start with defining the data definitions per competent authority. Once this is done, it could detect and eliminate overlaps. A unified code for each data definition will support this (and will ease machine readability). In case an authority wants to add a new definition, it should clearly state why this definition from its point of view is missing in the central dictionary. Then a board of supervisors for prudential and statistical reporting should judge the new requests and, if approved, should ensure that the data element is added to the central framework.

Please insert your answer to Q 47 here

We consider that this matter should be discussed in the further course.

If no, please explain:

Other (please explain)

please explain "other" from the above question

The use of RegTech by the institutions differs. Some of them do not use it at all. Others use it partially, for example, to support data collection and transformation. There are also institutions using it widely, in each step of the reporting process.

Please include any other comment to question 49

The advantages of using RegTechs can only be assessed on an institution-specific basis. The larger and more complex or specialized an institution's business, the lower the marginal benefit of using a RegTech.

53) Do you agree that data standardisation is the first necessary step for using RegTech?

Yes

Name of the organization

European Association of Public Banks (EAPB)