EBF WORKSHOP WITH BAFIN

‘A Reporting System for the Future: Redesign options for regulatory reporting’

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Brussels, 6 October 2022 – As part of the banking industry’s involvement in the efforts towards reaching a European integrated reporting system, the European Banking Federation (EBF) and Germany’s Federal Financial Supervisory Authority (BaFin) hosted recently a workshop to delve into the findings from the feasibility study “Redesign for Regulatory Reporting” produced by BaFin together with Deutsche Bundesbank, Germany’s Federal Ministry of Finance and the German banking industry.

The workshop brought together about 200 participants from 80 banks in over 25 countries exposing the broad interest by the European banking industry on all initiatives aiming to simplify the implementation of reporting requirements for financial institutions and to fix the inefficiencies of the current reporting system in Europe that has been pushing the estimated average ongoing annual reporting costs for the financial industry to over €20 billion per year.

The workshop took industry representatives through the assessment of the current state of regulatory reporting in Europe, facing increasing burden and complexity, resulting in a data-driven reporting without templates as the preferred scenario for the parties involved in the BaFin study. Such scenario meaning in practice the delivery by banks of quality-assured granular data accompanied by a set of aggregated anchor values, based in the common data model format, with supervisors processing and aggregating these data to generate reports as the need arises and without involvement by institutions. This vision, replacing today’s template-based delivery, would help banks and authorities reaching benefits in terms of a truly Report Once principle for banks and improved capabilities for supervisory analyses for authorities, while at the same time being the most economically viable scenario as result of a cost-benefit analyses undertaken as part of the study. The workshop also presented the views on the findings from the perspective of a participating bank in the BaFin study.

While the scope of the BaFin study regarded supervisory reporting, the study also concluded that the data-driven approach without templates scenario is interoperable with supervisory and statistical initiatives. Accordingly, the vision could be well applied in the context of (i) the ongoing work following the feasibility study on an integrated reporting system produced by the European Banking Authority (EBA) in cooperation with the European System of Central Banks’ (ESCB), Single Resolution Board (SRB), under the monitoring by the European Commission (EC) in line with the mandate included in Article 430C of the Capital Requirements Regulation (CRR), and (ii) the ESCB’s Integrated Reporting Framework (IReF).

The BaFin study also successfully applies the Banks’ Integrated Reporting Dictionary (BIRD)3 using the logical BIRD data model to integrate supervisory and statistical data requirements, having the benefits of reaching a regulatory data dictionary for a single collection of granular data and anchor values. The effective use of BIRD by the BaFin study is very relevant since a EU-wide single regulatory data dictionary is the cornerstone of the European project. Furthermore, with the IReF based on the BIRD data model, the BaFin study considers the IReF as a minimum viable product for statistics to be extended to other types of reporting, exploiting even more the synergies with the EBA’s feasibility study and becoming of relevance also for other authorities such as the Single Supervisory Mechanism (SSM).

The vision developed by BaFin, Bundesbank and the German banking industry mirrors the EBF calls to have IReF as a scalable model not limited to statistical reporting only, seeking a single dictionary for all reporting duties with a common language within all EU reporting actors, and that reporting efforts need to be carefully reviewed and a common vision developed by banks together with the regulators and supervisors in a collaborative approach as the only way to find a new system that is feasible for all.

The EBF, as voice of Europe’s banking sector, remains fully committed to continue working closely together with all authorities and look forward to discussing the findings of the BaFin study with EU authorities.

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For more information:

Francisco Saravia, Senior Policy Adviser – Prudential Policy & Supervision, f.saravia@ebf.eu

About the EBF:

The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere.