Data needs to assess the health of systemically important financial institutions

1. Data needs to assess the health of systemically important financial institutions Werner Bier Deputy Director-General Statistics IMF-FSB Users Conference on the Financial Crisis and Information Gaps Washington DC, 8-9 July 2009

2. European Systemic Risk Board (ESRB) Ecofin conclusions on Strengthening EU financial supervision: 1. The Council agrees that an independent macro-prudential body covering the financial sectors, the European Systemic Risk Board (ESRB), should be established ... and charged with … i. define, have access to and/or collect as appropriate, and analyse all the information relevant for identifying, monitoring and assessing potential threats and risks to financial stability in the EU that arise from macro-economic developments and developments within the financial system as a whole; vi. liaise effectively with the IMF, the FSB and third countries. 5. The Council considers that the ECB should provide analytical, statistical, administrative and logistical support to the ESRB, also drawing on technical advice from national central banks and supervisors.

3. Current ECB macro-prudential analysis • Semi-annual Financial Stability Review (FSR) and annual report on the EU banking sector • Data collection may be enhanced by an amended ECB legal basis • Several data sources: FSR based on public disclosure (Pillar 3 of Basel II), without standard format • Improvements in public data disclosures in recent years, but important limitations still exist • Future: key role of European Systemic Risk Board (ESRB)

4. Focus on large financial institutions • Focus of FSR on Large and Complex Banking Groups(LCBGs) and insurance corporations • Approach to enhance the reporting framework may comprise two cornerstones: • Identify reporting institutions • Define reporting requirements that fulfil ESRB requirements and minimise combined supervisory and statistical reporting burden

5. Defining reporting requirements I Possible scope - beyond public disclosure - of data neededin the EU to assess health of systemically important financial institutions, also in relation to a systemic risk assessment: • Balance sheet, income statement, and solvency data. Broadly harmonised by Committee of European Banking Supervisors (CEBS), but further harmonisation necessary; • Data on liquidity risk, leverage, risk concentration, detailed exposures/bilateral positions, etc. • Datasets are not harmonised, but harmonised data definitions, frequency, timeliness and reporting formats are required.

6. Defining reporting requirements II Additional data requirements: • Need to accurately capture cross-border, cross-sector and cross-institution exposures; • Data on a security-by-security basis supported by the Centralised Securities Database (CSDB) and on a loan-by-loan basis; • Macro-Prudential Indicators (MPIs) and Euro Area Accounts (EAA) as a link to the real sector. It will be indispensable to further integrate statistical and supervisory data sources

7. International data comparability • Need for an appropriate alignment of EU and international initiatives while the EU timetable is becoming more and more concrete • Common reference to international statistical, accounting and supervisory standards • Keep to the degree possible links with international statistics (BIS’s consolidated banking statistics and the IMF’s Financial Soundness Indicators) • Synergies with global initiatives, such as those of the IMF and FSB