Analytical Credit Dataset (AnaCredit) - Are you ready?

Transcription

1 Analytical Credit Dataset (AnaCredit) - Are you ready?

2 STATUS QUO On 08 April 2014, the European Central Bank (ECB) announced resolution ECB/2014/6, laying the foundation for the establishment of a new European central credit register. The far-reaching impact of the Analytical Credit Dataset (short form: AnaCredit) initiative will affect virtually all financial institutions. This ECB regulation was enacted on 18 May 2016 and published shortly thereafter. The resolution primarily concerns the provision of a wealth of information about the institution s borrowers, the loans it has granted as well as the collateral for those loans, to the respective national central banks of member countries. The national central banks will then transmit this anonymized data to the ECB. This report must be provided in addition to the reporting requirements already in place. The regulation applies within the European Economic and Monetary Union. OBJECTIVES» create a standardized European credit register» allow for organized collection and administration of granular credit data» gain an overview of debtors as well as the nature, amount, terms of loans granted in the Eurozone» provide data to ECB for statistical and regulatory purposes as well as for monetary considerations» monitor institutions via Single Supervisory Mechanism (SSM) SM) REQUIREMENTS AND SCOPE FOR INSTITUTIONS The reporting requirement initially pertains exclusively to loans granted to legal entities. The reporting threshold is set at (based on the sum of all loans per borrower). Reporting for mortgage loans to private individuals will be not required in Phase I (as of ) though it is expected to be required in future phases. Monthly reporting will be conducted for each and every individual loan dataset of affected borrowers via the German Central Bank to the ECB on a loan-by-loan basis. The master data information relevant to the report must be transmitted on a one-off basis or, in the event of changes, transmitted on an ongoing basis.

3 The 95 attributes currently required can be broken down into the following categories:» lenders» borrowers» commercial data» protection seller» protection buyer» knowledge of investment pools and debt ratios. The German Central Bank is not expected to require reporting for attributes beyond those explicitly mandated by the ECB during Phase I. However, all national central banks within the European Monetary Union are free to mandate reporting of additional attributes as desired. IMPLEMENTATION AND ANTICIPATED TIMELINE The draft resolution from December 2015 provides for a brief observation period lasting until 29 January 2016 during which time comments can be submitted to the ECB. The final consultation and decision of the ECB s Governing Council took place on 18 May Instructions from the German Central Bank based on the resolution in accordance with 18 BBankG have yet to be provided. Implementation is expected to proceed in a number of phases, starting with Phase I on 31 December From that date on, the national central banks will initially be free to demand master data and amount data from the institutions. The German Central Bank has already announced a test phase that will precede the first report transmission. Current statements made by the German Central Bank are limited to advanced reporting of master data starting in the first quarter of However, it can t be ruled out that this will be extended to cover amount data. At the moment it remains to be seen to what extent the German Central Bank will implement the ECB resolution in detail. The first transmission of the report to the ECB is currently scheduled for 30 September Though further phases have yet to be defined, the ECB will announce these at least two years in advance. The following graphic depicts the implications of each individual phase: BuBa 2017: test phase for German Central Bank expected As of Q1 2018: advanced reporting of master data (& amount data) possible for German Central Bank Later phases: potential reporting of further loans to private households EZB March/April 2015 meeting of the Joint Task Force on analytical datasets, preparation for decision on methodology Dezember 2015 publication of the proposal for AnaCredit ECB resolution observations to ECB by 29th January 2016 May 2016 final consultation and enactment of resolution by ECB Governing Council Q publication by ECB As of 31/01/2017 Use of AnaCredit ECB resolution Phase I 30/09/2018 first reporting to ECB for Phase I Later phases: potential expansions: - group reporting, - derivatives, - further off-balancesheet products Mid 2015 ECB resolution with clarification of deadlines, means of transmission, transmission frequency, transmission format STC decision on proposal for AnaCredit ECB resolution and subsequent approval by ECB Governing Council Phase I: 30/09/2018 Institutions (modeled after CRR) including branch offices worldwide Later phases: mortgage loans to private households Lenders: - investment groups - insurance groups

4 CHALLENGES The greatest challenge for the affected institutions will be compiling the data from the various areas in question, for example risk management, lending, reporting, accounting, etc., and providing that data in the required levels of quality and granularity. For most institutions, current IT-architecture, existing data availability in the front office as well as current data warehouse processing will not be up to this task. The following points provide an overview of the specifi c challenges in store for fi nancial institutions:» Comprehensive adjustments to systems and processes will be required. One must take full advantage of the narrow time window between identifying an approach and implementing it. This is especially true for procedural issues.» Additional challenges will arise especially for financial institutions with foreign branch offices or subsidiaries in connection with national requirements and late group reporting.» A variety of data suppliers are involved in procuring the required information. The role of creating a uniform database in doing so, partially from a variety of business areas, must not be underestimated.» Significant improvements to data quality will be required due to the low reporting threshold.» Manual corrections will not be possible due to the high data volume. Notwithstanding this, consistency with other reports must be ensured.» Potential overlap with or implementation in connection with other projects (e.g. BCBS 239 and FinRep) should be examined. In light of the narrow time window and stringent requirements, financial institutions must react quickly and conduct a gap analysis as soon as possible. A cost estimate for implementing the project appropriate to the institution s structure should be made at an early stage. Addressing these issues head on with appropriate project planning from the outset are the only means of ensuring suitable and timely implementation.

5 OVERVIEW OF OUR SERVICES The SKS Group is here to support you with a preliminary study to identify gaps and fields of action relevant to implementing AnaCredit. We then provide expert and technical support via SKS Advisory and SKS Solutions in the course of an implementation project. Our approach has proven successful in delivering solutions for a great number of clients. More specifically, we provide the following services: conduct of workshops planning support conduct of preliminary analysis development of technical and IT-concepts our services analyses of data requirements and identifies data sources project coordination and management development of implementation concept for manual supply processes

6 ANSPRECHPARTNER CONTACTS SKS ADVISORY Matthias von der Schulenburg Head of Strategic Advisory Mobile Dr. Volker Gehrmann Senior Manager Mobile SKS Unternehmensberatung GmbH & Co. KG Geheimrat-Hummel-Platz Hochheim am Main Tel Fax