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Europe announces massive FS regulatory database plans


Europe announces massive FS regulatory database plans

London – 1 June 2009.  Last week, the European Commission announced proposals for its new regulatory architecture.  As part of this aggressive restructuring plan, its newly-formed European Systemic Risk Council (ESRC) and a European System of Financial Supervisors (ESFS) will be given the mandate to establish a central European database which contains “all relevant micro-prudential information emanating from national supervisors”.  This means that, for the first time, an integrated cross-border view of the banks’ positions will be available to regulators and policy makers.

According to commission documents issued last week, the ESFS will be responsible for “aggregating relevant anonymous disaggregated data on all financial institutions and markets, but notably on large and complex cross-border groups” and sharing this information with the ESRC. 

PJ Di Giammarino, CEO of the JWG-IT think-tank, believes the European Commission and the ESFS are taking on a radical control programme, in a complex, fast moving and high stakes environment, with insufficient preparation:

“It’s one thing to demand this amount of data, it’s quite another to develop systems that can do something useful with it.  The level 3 committees and member State regulators do not have a good track record of creating valid, consistent and common views of data that can be used for effective decision making.” 

“The European Commission should scope its plans carefully, in consultation with industry technology experts, in order to develop an implementation plan that will actually work.”

JWG-IT think the industry will struggle to develop the right tools to govern and control the system, because:

  • It requires clarity on what data it is trying to collect, how it is controlling it and why
  • It needs a common target data model which can support decision making and provide regulators with the information they need
  • A neutral party is needed to create open standards with industry input as proprietary data stores foster complexity and restrict collaboration.

Di Giammarino concludes “There’s no easy way for the regulators to achieve the ambitious data integration targets that have been set for them without the banks’ help.  Success will also require the participation of industry consortia and independent third parties who can provide vendor-neutral perspectives.”

About JWG-IT Group Limited
JWG-IT is the only financial services industry think-tank to facilitate collaborative work to resolve industry issues created by regulatory change.  Based on a working model started in 2005, JWG-IT has established strong relationships with EU administrators, leading firms and companies.  It is neither lobbyist nor consultancy and revenues are restricted to membership and event fees and content sales.  The JWG-IT Think-Tank is designed to help members and participants manage regulatory-driven change better, quicker, cheaper and with less risk.  JWG-IT launched the customer data management group and the liquidity risk action network in 2008.  For more information, see www.jwg-it.eu.

For immediate release

Business contact : PJ Di Giammarino, pj@jwg-it.eu, +44 (0) 7811 430 503

Communications contact : Louisa Excell, Louisa.Excell@hotwirepr.com

+44 (0) 20 7608 2500



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