France & Austria: exploring different paths to maximized ... BCBS 239, Principles for effective risk

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  • « France & Austria: exploring different paths to maximized value- creation in regulatory reporting»

    Paris, le 20 septembre 2016

    Développer et promouvoir une « smart regulation » à travers l’échange entre régulateurs et régulés

  • In search of a regulatory reporting system that is ‘useful’ and economical

    Dr. Maciej Piechocki

    Paris, September 20th, 2016

  • 3

    Agenda

    2. Tackling the regulatory reporting burden … differently

    1. Regulatory reporting trends in Europe

  • 4

    Trend 1: The global regulation flood is not ending

    Regulatory Trends

    0

    5

    10

    15

    20

    25

    30

    35

    40

    45

    50

    1975 1980 1985 1990 1995 2000 2005 2010 2015

    A n

    za h

    l d er

    V er

    ö ff

    en tl

    ic h

    u n

    ge n

    B C B S P U B L I C AT I O N S S I N C E 1 9 7 5

    Standards Guidelines Sound Practices Implementations Others n/a

    Basel I Basel II Basel III

  • 5

    Trend 2: The European Single Rule Book is ever-increasing

    Regulatory Trends

    The European Single Rule Book (as of 31.07.2015)

    1120 articles in the official journal

    of the European Union

    10 regulatory reporting frameworks

    (up to 700.000 data points per bank/rep date)

    33 GL

    CRR/CRD-IV

    704 Q&A 28 ITS,

    43 RTS

    BRRD, DGSE

  • 6

    Trend 3: Substitution of reporting templates by granular data cubes Regulatory Trends

    Data Cubes

    • granular data • multi-use of information • „unlimited“ analysis • „simply“ extensible • consistent • comparable • source validation Initiatives and projects AnaCredit, ERF*, B.I.R.D.*

    Templates

    • aggregated data • fixed • limited analysis • costly extension • error prone • apples and oranges? • output validation

    * ERF = European Reporting Framework * B.I.R.D. = Bank’s Integrated Reporting Dictionary

  • 7

    Trend 4: Substitution of rule-based by ad-hoc reporting obligations Regulatory Trends

    Risk data

    Accounting data

    Master data

  • 8

    Self-assessment ratings by Principles (31 G-SIBs/D-SIBs, BCBS 307)BCBS 239, Principles for effective risk data aggregation and risk reporting

    Trend 5: Increasing importance of risk data aggregation and risk reporting Regulatory Trends

    GS 7-11

    P 3-6

    P 2

    P 1 • Corporate Governance

    • Data architecture and IT infrastructure

    • Risk data aggregation capabilities

    • Risk reporting

    BCBS 239

    BCBS 239, Key requirements

    • Data governance • Data consistency • Adaptability • Agility

    BCBS 239 Deadlines

    G-SIBs

    2013 2014 2015 2016 2017 2018

    ???SIBs

    ???All

  • 9

    Trend 6: Banking Regulation is increasingly restricting banks business models Regulatory Trends

    SREP

    EMIR

    Pillar I Capital requirements Liquidity requirements

    Pillar II Internal Capital Adequacy Internal Liquidity Adequacy

    Competitors

    Markets

    Basel 3.5

    I Cash II Loans III ….

    I Deposits II Debentures III ….

    IV Own Funds

    Assets Liabilities

  • 10

    Agenda

    2. Tackling the regulatory reporting burden … differently

    1. Regulatory reporting trends in Europe

  • 11

    Central banks foster new coopetition models in financial services using granular data submissions

    Largest regulatory reporting factory enabled by BearingPoint

  • 12

    Contact details

    Dr. Maciej Piechocki Partner

    BearingPoint Speicherstraße 1 60327 Frankfurt

    maciej.piechocki@bearingpoint.com

    T +49 69 13022 6167 M +49 152 22860072

    www.bearingpoint.com

  • New Ways in Reporting for Austrian Banks

    European Institute of Financial Regulation (EIFR), September

    20, 2016

    Johannes Turner Director Statistics Department

    Oesterreichische Nationalbank

    www.oenb.at

  • www.oenb.at oenb.info@oenb.at- 15 -

    The Austrian banking system

    Top banks (> 50% of balance sheet total (bst))

    Radius ~ unkons. BBS

    Other medium sector banks (~20% of bst)

    Small and

    decentralised banks (~20% of bst)

    ~ 680 institutions

    3BG

    3BG

    3BGwü

    ~ 720 Banks in Austria

    Thereof ~650 CRR CIs

    ~ 80 foreign

    subsidiaries

  • www.oenb.at oenb.info@oenb.at- 16 -

    Facing the challenge Benefit from synergy effects of an harmonised reporting process

    Organisationsstruktur 2008 - 2012

  • www.oenb.at oenb.info@oenb.at- 17 -

    Why new ways in data reporting?

     In the field of central banks’ statistics and supervision user and hence data

    reporting requirements have grown significantly

     They are getting more granular and complex

     Traditionally, each institution used its own approach to data collection

     Leads to redundant data collection schemes and a lack of data consistency

     Internal and external reporting often diverge

     Need for high-quality, comparable and timely data on the one hand (BCBS

    239) and cost efficiency on the other-hand motivate for

     New ways in data reporting

  • www.oenb.at oenb.info@oenb.at- 18 -

    The two pillars of the Austrian way

     Precondition: Commitment of banks‘ top management to support the new ways of

    reporting

     Objective: medium term cost savings for the whole market with better data quality

    Joint

    development of

    the integrated

    reporting data

    model – SCom*

    Banks’ joint

    reporting

    infrastructure –

    AuRep*

    *SCom … Standing Committee between banks and OeNB

    *AuRep … Austrian Resporting Services GmbH

  • www.oenb.at oenb.info@oenb.at- 19 -

    Key factor cooperation with banks

    Basic

    Cube

     Selection

     Transformation

     Aggregation

    Loan

    CubeSecurities

    Cube

    Other

    Smart

    CubesDeposits

    Cube

    Banks AuRep* and other service providers OeNB

    Enrichment

    Smart Cubes

    SCom Joint development

    *SCom … Standing Committee between banks and OeNB

    *AuRep … Austrian Resporting Services GmbH

  • www.oenb.at oenb.info@oenb.at- 20 -

    Austrian Reporting Services GmbH Tasks

     Founded in 2014 by 7 banks as central reporting platform

     AuRep covers now about 90% of the Austrian banking sector

     Banks are still responsible for correctness of the reports and their content

     Main tasks

     Production of Smart Cubes (multidimensional reporting forms)

     Pre-testing the joint reporting software

     Interface to software developer

     Interface to banks regarding sourcing of the joint reporting data warehouse (Basic Cube)

     Central contact for OeNB in case of technical issues

     Cooperation with OeNB regarding mapping rules from Basic Cube to final templates

     Strategic partner of OeNB concerning the further development of the reporting data

    model

  • www.oenb.at oenb.info@oenb.at- 21 -

    Advantages/Challenges

     Consistent implementation of integrated data model 

    avoiding double efforts for the implementation

     Unique software and hardware

     Central enrichment, aggregation, quality assessment- and

    correction procedures

     Central discussion platform

     Central interface (i.e. intermediary) to OeNB

     Higher project risk for banks due to initial costs, new

    interfaces, processes & responsibilities, performance

     Acceptance of the new roles and using synergy potentials

  • www.oenb.at oenb.info@oenb.at- 22 -

    The Role of BDD, ERF and SDD

    P ri

    m a ry

    d a ta

    (O p

    e ra

    ti o

    n a l

    s y s te

    m )

    In p

    u t

    la y e r

    O u

    tp u

    t la

    y e r

    N C

    B s /N

    S A

    s r

    e q

    u ir

    e m

    e n

    ts

    S e c o

    n d

    a ry

    s ta

    ti s ti

    c s a

    n d

    te m

    p la

    te s (

    B S

    I, F

    IN R

    E P ,. .. )

    Transformations defined

    by banks Transformations defined

    by banks and authorities

    in close collaboration

    Transformations

    by banks

    Transformations

    by banks

    Transformations

    by NCBs/NSAs

    Transformations defined

    by NCBs/NCAs and ECB

    in close collaboration

    Basic Cube Smart Cubes

    BIRD ERF

  • www.oenb.at oenb.info@oenb.at- 23 -

    transmission

    release through

    credit institutions

    In te

    rf a c e s o

    p e

    ra ti

    o n

    a l

    s y s te

    m s

    Meldewesen Wik