The need for worldwide financial market standards Aurel Schubert Director-General Statistics, ECB Hansjakob Schlaich Adviser DG Statistics, ECB Who trades what? Who holds what? Who holds which risk? Who is exposed to which counterparties? Who … The need for worldwide financial market standards

[…] Finance is a global business, and both the regulation and the underlying data requirements for global institutions would benefit from more harmonisation worldwide. Concrete steps towards standardisation include the establishment of mandatory requirements regarding the use of the International Securities Identification Number and the global Legal Entity Identifier […] - Mario Draghi, ECB Statistical Conference 2016 Who trades what? The need for worldwide financial market standards

The need for cross-border standards Sharing of data Increasing amount and variety of microdata Transactional, banking supervision and statistical data, credit cards data, wire services etc. Public action Policy making, reporting, regulation, managing risks Issue - Risk “Local” standards - limited to certain use cases Missed business opportunities and high(er) costs Who trades what? The need for worldwide financial market standards

Standardisation Agenda? Source: http://xkcd.com/

Agree on common concepts Technical Define common data standards, harmonise concepts, introduce cross-border identifiers (LEI, UPI, UTI, ISIN) Legal concepts Facilitate common governance e.g. CRR III, ESA 2010 (macrodata) Cultural challenges Public action, balance needs, align different perspectives From the source to final use – consider the full data value chain Who trades what? The need for worldwide financial market standards

Contribution of the ECB Europe Bank Integrated Reporting Database (BIRD), European Reporting Framework (ERF), Single Data Dictionary (SDD) Analytical Credit Dataset (AnaCredit) Money Market Statistical Reporting (MMSR) Prospectus Directives World Financial Stability Board (FSB, e.g. CPMI-IOSCO WG) Basel Committee on Banking Supervision (BCBS) International Organisation for Standardisation (ISO) Universal Financial Industry message scheme (ISO 20022 / TC 68) Who trades what? The need for worldwide financial market standards

Cross boarder identifiers Application Cross boarder identifiers Legal Entity Identifier (LEI) Reference and in future Relationship data Unique Product Identifier (UPI) Unique Transaction Identifier (UTI) Under development in particular OTC derivatives Mandatory use will increasing coverage significantly – e.g. EMIR regulation, security prospects, etc. DG-Statistics participation promotes: detailed and clear guidance good practices of statistical reporting and database management design of solutions, which are technically feasible and work in practice consistency Who LEI Trades UTI What UPI Who trades what? The need for worldwide financial market standards

The Legal Entity Identifier – Progress of Registration Application The Legal Entity Identifier – Progress of Registration 466,832 Identifiers Who trades what? The need for worldwide financial market standards

Conclusion Perspective Requirement to use and integrate microdata necessitates worldwide financial market standards Development ECB and ECB Statistics promote: detailed and clear guidance, best practices for reporting, synergies, consistency, technically feasible and practical solutions Engage Statistical stakeholders - public organisations, academia and industry, foster collaboration, need to join forces Who trades what? The need for worldwide financial market standards

Questions and Answers

Further Reading Second Phase of the G20 Data Gaps Initiative (DGI-2): First Progress Report Financial integration in Europe, 2016 April. European Central Bank Chapter 3, page 75 Welcome Address to the Eighth ECB Statistics Conference by Mario Draghi Bottega, John A., and Linda F. Powell. "Creating a linchpin for financial data: Toward a universal legal entity identifier." Journal of Economics and Business 64.1 (2012): 105-115. CPMI-IOSCO, Harmonisation of key OTC derivatives data, Consultative report (2015), page 2-3. BIRD (Banks Integrated Reporting Dictionary): banks-integrated-reporting-dictionary.eu Opinion of the ECB on the prospectus directives (CON/2016/15) Enter presentation title by changing the footer.

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Need for global standards at the ECB Rapid expansion of demand and availability of data ECB’s Monetary Policy Banking Supervision (SSM) E(S)CB Macro prudential policies (ECB, ESRB) Setting Global Standards for Granular Data, 2nd OFR/BoE/ECB workshop, 29-30 October 2015

Financial Markets Data Standards ECB-UNRESTRICTED An Overview Setting Global Standards for Granular Data, 2nd OFR/BoE/ECB workshop, 29-30 October 2015