Julkinen Reporting Info 22 May May 2014

Julkinen Agenda Revamp of data collection in January – Jyrki Lehtinen Money market statistics – Ellu Hintikka Granular credit database – Ellu Hintikka, Essi Tamminen, Jyrki Lehtinen, Saija Kuivalainen Other matters – Ellu Hintikka

Julkinen Granular credit database – background The financial crisis has highlighted the need for more detailed information on types of loans and credit risk in the following areas: –Monetary policy analysis and evaluation of monetary policy transmission mechanism –Monetary policy operations –Euro area collateral management –Macroeconomic stability surveillance and analysis –Statistics and other analyses –Research –Banking supervision

Julkinen Granular credit database – background Decision ECB/2014/6 on the organisation of preparatory measures for the collection of granular credit data by the European System of Central Banks Requires that central banks start preparatory measures for constructing granular credit databases. Progress reports on preparatory measures to be submitted twice a year to the Statistics Committee/Governing Council

Julkinen Granular credit database – objective (1/2) Flexible, multi-purpose database containing a core set of harmonised data on types of loans, off- balance-sheet credit exposures, credit derivatives, securities May include aggregated data Covers credit institutions and other loan-providing financial institutions Construction in phases (national decisions permitted); first phase completed by the end of

Julkinen Granular credit database – objective (2/2) Can be combined with other databases, such as –RIAD: ESCB Register of Institutions and Affiliates Database –SHS: securities holiding statistics –CSDB: centralised securites database By loan type and type of borrower

Julkinen Analytical credit database – ACDB Analytical credit database Reporters: BSI REPORTERS Content of database: DEFINITION OF LOAN Structure of database: DATA CONTENT Frequency: QUARTERLY

Julkinen Analytical credit database – ACDB Quarterly Reporting lag - open Frequency RATI reporters Requirement for a meaningful database Reporters Credit risk exposure Broad definition Content of database Loan-by-loan (not borrower-by-borrower) Structure of database

Julkinen Expense survey Expense survey is part of the ECB’s cost-benefit analysis Expenses are evaluated nationally for different attributes and finally combined to cover the entire euro area/EU New IT systems and processes are evaluated (Finland has not had a loan register or a corresponding credit database) Essi Tamminen 9

Julkinen Tables in expense survey TABLES A-E Table A –Expenses estimated ’by package’ that include attributes –By borrower, by reporting entity, quarterly –Sources Table B –Includes other questions relating to the setting up of the system, covering scope, threshold values, loan type, quality assurance –Table B is filled in after table A Table C –Investigates data collection in a consolidated manner Table D –Investigates connections of future database to other existing databases; to be filled in by central banks only Table E –Investigates potential long-term benefits of database to reporters Table F –Solicits necessary additional information Essi Tamminen 10

Julkinen Analytical credit database – ACDB The type of product as recorded on the internal system of the Significant Bank. To be completed regardless if on- or off-balance sheet. Examples in EBA/ITS/2013/3 Annex V 2.41 (a)-(l): on demand and short notice, credit card debt, trade receivables, finance leases, reverse repurchase loans, advances that are not loans, project finance loans, loans collateralised by immovable property, other collateralised loans, other debt securities, auto finance (these are examples, other values are possible) etc.

Julkinen Basic structure of analytical credit database CREDIT DATABASE // LUOTTO- TIETOKANTA 1. LENDER / BORROWER ATTRIBUTES // LUOTONANTAJAN JA LUOTONOTTAJAN TIEDOT 2. ATTRIBUTES // LUOTON PERUSTIEDOT 3. BALANCE SHEET STATUS // LUOTON TASETIEDOT 4. LOSS MEASURES // LUOTON TAPPIOT 5. RISK MEASURES // RISKIMITTARIT 6. VALUATION MEASURES // ARVOTIEDOT 7. REPORTING FEATURES // RAPORTOINNIN FREKVENSSI JA RAPORTOINTIVIIVE

Julkinen Basic view of expense survey AttributesSetting up expenses Running expenses Data systemSetting-up expenses Running expenses Benchmark (BK) basic data 2. Basic credit dataRA% from expenses Currency Interest rate Fixed interest-rate period Package 1 + additional attributes Reference rate Interest rate margin Package 2 + additional attributes Modified remaining duration Weighted remaining duration

Julkinen Definitions of rows and columns Setting-up expenses Running expenses Data systemSetting-up expenses Running expenses Benchmark basc data (BK) Attributes for the ’packages’ REPORTING ENTITY% from expenses Benchmark basic data (BK): minimum data requirements for a given group of attributes Additional details X: supplementary data for a given group of attributes Additional detail 1 Attributes: Definitions package supplied with data collection Setting-up expenses: Expenses arising from the requirements before reporting for the first time. Expenses are estimated using the expense estimate scale. Additional detail 2 Running expenses: Running supply of data according to requirements. Expenses estimated using the expense estimate scale.. Data system: System from which data is sourced.

Julkinen Expense estimate scale Essi Tamminen 15 Setting-up expensesMaintenance expenses 1 Minor changes in IT systems (or none at all) and minor increase in volume of labour (including training) Minor increase in volume of labour (or no increase) 2 Some small changes in IT systems and volume of labour (including training Small increase in volume of labour 3 Relatively large changes in IT systems and relatively small increase in volume of labour Relatively large increase in volume of labour 4 Significant changes in IT systems and volume of labour (including training) Signficant increase in volume of labour 5 Fundamental changes in IT systems and volume of labour (including training) Fundamental increase in volume of labour NF Classification not possible (requires comments) Classification not possible (requires comments)

Julkinen Source of data Internal source of data: –(A) accounting system –(R) risk-based system –(O) other

Julkinen Filling in the expense survey AttributesSetting-up expenses Running expenses Data systemSetting-up expenses Running expenses Benchmark (BK) basic data 2. Basic credit dataREPORTING ENTITY% from expenses Currency Interest rate Fixed interest-rate period Package 1 + additional attributes Reference rate Interest-rate margin Package 2 + additional attributes Modified remaining duration Weighted remaining duration

Julkinen For setting-up and reporting expenses, the most expensive requirements are reported for each group of attributes AttributesSetting-up expenses Running expenses Data systemSetting-up expenses Running expenses Benchmark (BK) basic data 2. Basic credit dataREPORTING ENTITY% from expenses Currency 42 Interest Fixed interest-rate period Package 1 + additional attributes Reference interest rate 31 Interest-rate margin Package 2 + additional attributes Modified remaining duration 32 Weighted remaining duration

Julkinen Data source is registered from the current data system for each attribute separately (recommendation) AttributesSetting-up expenses Running expenses Data systemSetting-up expenses Running expenes Benchmark (BK) basic data 2. Basic credit dataREPORTING ENTITY% from expenses Currency 42 A Interest rate A Fixed interest-rate period A Package 1 + additional attributes Reference interest rate 31 R Interest rate margin O Package 2 + additional attributes Modified remaining duration 32 R Weighted remaining duration R A: accounting system, R: risk-based system or O: other system

Julkinen COLUMN BALANCE ’100’ IS ADDED FOR THE % DATA OF EACH GROUP OF ATTRIBUTES AttributesSetting-up expenses Running expenses Data systemSetting-up expenses Running expenses Benchmark (BK) basic data 2. Basic credit dataREPORTING ENTITY% from expenses Currency 42 A Interest rate A Fixed interest-rate period A Package 1 + additional attributes Reference interest rate 31 R Interest rate margin O Package 2 + additional attributes Modified remaining duration 32 R Weighted remaining duration R

Julkinen AN EXPENSE PERCENTAGE IS ASSIGNED TO EACH ATTRIBUTE AND TOGETHER THEY ADD UP TO 100 AttributesSetting-up expenses Running expenses Data systemSetting-up expenses Running expenses Benchmark (BK) basic data 2. Basic credit dataREPORTING ENTITY% from expenses Currency 42 A1015 Interest rate A2515 Fixed interest-rate period A2515 Package 1 + additional attributes Reference interest rate 31 R15 Interest rate margin O515 Package 2 + additional attributes Modified remaining duration 32 R1215 Weighted modified duration R

Julkinen HOW TO FILL IN IF ONE OF THE ATTRIBUTES HAS A VALUE ’NF’ (= CLASSIFICATION NOT POSSIBLE) AttributesSetting-up expenses Running expenses Data systemSetting-up expenses Running expenses Benchmark (BK) basic data 2. Basic credit dataREPORTING ITEM% from expenses Currency 42 A1015 Interest rate A3730 Fixed interest-rate period A2515 Package 1 + additional attributes Reference interest rate 31 R15 Interest rate margin O515 Package 2 + additional attributes Modified remaining duration NF Weighted remaining duration R810 EXPENSES STILL ADD UP TO 100. AN EXPLANATION HAS TO BE PROVIDED IN THE COMMENTS SECTION FOR EACH ATTRIBUTE WITH THE VALUE ’NF’. 100

Julkinen Aikataulu Deadline for returning expense survey 11 June Essi Tamminen 23

Julkinen Project timetable 1 January 2015 – 31 December 2016 (= 24 months) –Release 1: launch 8/2016 –Release 2: launch 12/

Julkinen Other matters (1/2) Request for more time –More time can be requested up until the end of office hours on the last day of the survey For any revisions, please give advance notice For any major changes from previous month’s reporting, please inform by in advance All contact requests by at

Julkinen Other matters (2/2) Information about group structures and close connections –Data is needed for the ECB’s Register of Institutions and Affiliates Database (RIAD), which is also used for identifying close connections between monetary policy counterparties → data collection in collaboration with the Banking Operations being planned