Banks Push Back On Regulatory Reporting

Terry Flanagan

Industry responds to proposed common data template for G-SIBs.

Financial institutions are chafing at onerous data reporting obligations that would be required once they’re tagged as global systemically important banks (G-SIBs).

The Canadian Bankers Association noted that while data collection efforts by global regulatory authorities could help identify emerging risks to the global financial system, such data collection efforts should be of a targeted nature.

These efforts “should emphasize the need to collect the most accurate and consistent data from the affected banking organizations rather than attempting to capture large volumes of data that lack adequate review and verification,” the CBA said.

The CBA’s comments were in response to a consultation paper published last October by the Financial Stability Board on a common template for G-SIBS, intended to address key information gaps identified during the crisis and to provide authorities with a framework to assess potential systemic risks.

The FSB plans to hold a workshop on May 2 in Basel with representatives from major banks to discuss the technical aspects of the proposed data requirements.

The common data template is designed for G-SIBs and other large internationally active banks. These institutions face the greatest challenges in collecting data cross the organization, as operations extend beyond numerous borders and therefore require participation from various units spread throughout the world.

“The new regulatory environment is causing firms to look for ways to consolidate their data from various sources, including customers, trades, reference data, and more,” Peter Duffy, chief technology officer at Sumerian, told Markets Media.

“Traditionally this data has all been held in different silos, but the new regulations are causing firms to combine their data and analyze it holistically to satisfy new risk and reporting requirements,” he said.

The Canadian banking industry is heavily regulated, with CBA members subject to various accounting and regulatory reporting requirements.

The common data template proposed in the consultation paper may overlap with some of the current regulatory reporting requirements of Canadian banks, such as audited financial statements, Basel III capital and liquidity requirements, and monthly regulatory reporting to the Office of the Superintendent of Financial Institutions.

The consultation paper proposes and extremely aggressive and ambitious implementation timetable that many CBA members would be unable to meet, the CBA said.

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