European Banking Federation aisbl – 56 Avenue des Arts, B-1000 Brussels

Phone: +32 2 508 37 11 – Website: www.ebf-fbe.eu - EU Transparency register ID number: 4722660838-23

EBF_019220 27.1.2016

EBF COMMENTS ON THE ECB DRAFT REGULATION ON ANACREDIT

I. COMMENTS ON THE PROPOSED NEW EUROPEAN REPORTING FRAMEWORK

1) The EBF welcomes as a matter of principle the new approach to statistical and supervisory

reporting The Draft AnaCredit Regulation needs to be assessed in conjunction with, firstly, the European Reporting Framework (ERF) and the Banks’ Integrated reporting Dictionary” (B.I.R.D.), two projects to which AnaCredit is intrinsically linked and, secondly, the efforts which the central banks and/or National Central Credit Registers of various Member States are currently undertaking to set up in parallel a similar framework for the collection of granular credit and credit risk data with a view of serving their domestic information needs. Adopting such a holistic view, the EBF welcomes as a matter of principle and basically supports the new approach to statistical and supervisory reporting which the European Central Bank is proposing with a view to rationalise the flow of reporting streams. The EBF has long made called for an “integrated” reporting system which would align the various reporting streams to which banks are subject. When imposing new reporting requirements, public authorities have too often been focusing only on their specific information needs, without examining to what extent other public authorities have imposed identical or similar requirements. Clearly, such an outcome is not in line with the “single point of entry” principle: banks should be asked to report every piece of information only once, the understanding being that authorities would share the relevant data with each other subsequently to ensure that duplicating reporting requirements be eliminated. As such, the new ERF which the ECB aims to develop in the years to come is precisely meant to achieve such an alignment. More particularly, the ERF aims at building a framework which would allow banks to generate, on the basis of transaction level data which are available in their operational systems, reports to various authorities in a highly automated and integrated way. The main merit of the proposed new framework is that it adopts an integrated approach which has the potential of achieving a reporting system that is aligned with the single point of entry principle. Such a new framework is likely to enhance efficiency and, as a result, of producing cost savings both to the industry and to the public sector. The new approach will also allow banks to obtain a clearer view on reporting requirements. Furthermore, it may contribute to improving rulemaking considering that regulators will achieve a better understanding of how they need to describe what they wish to achieve.

2) However, the design of the ERF needs to be amended in a substantial way

It needs to be emphasised from the outset that the ERF will require banks to undertake substantial new investments in technology. The new attributes for which AnaCredit is asking require banks to connect their different internal sources and, therefore, to reorganise their IT and reporting structure. Moreover, these changes need to be made at a time when banks are faced with a growing number of new reporting streams flowing from the new regulatory architecture applicable to them. New processes will need to be established with state-of-the-art data processing, storage and dissemination infrastructure, including appropriate IT tools and solutions with the capacity to respond to present and future challenges. It needs to be emphasised in particular that some of the AnaCredit attributes are extremely challenging to integrate into an IT-model. The industry can only be expected to envisage making such significant investments provided that the Project is set up in such a way that it is indeed likely to achieve the expected cost-savings. The way in which the roll-out of the ERF is currently being conceived raises a range of uncertainties in this respect which need to be highlighted. The new approach which is being proposed will only be likely to deliver its promises provided that its design is amended in a substantial way. It needs, more particularly, abide by the following four basic principles. a) Domestic reporting systems need to be fully aligned to the new approach

Today, the ERF and the BIRD are being conceived as frameworks to which both banks and central banks are expected to adhere on a mere voluntary basis. Such an approach cannot possibly generate the expected cost-savings considering that it inevitably implies that the industry will continue to be faced with disparate statistical reporting requirements across the EU. As a consequence, today’s ever increasing number of statistical reporting requirements are becoming an obstacle to the completion a Single Market in financial services, thus jeopardising the substantial progress which the European Commission has achieved in the area of (supervisory) reporting requirements over the last decade. We fail to understand why, within a Single Market of financial services, whenever financial transactions are concerned, public authorities from Member State A, would need to be provided with information, that would differ from the financial information on the basis of which their counterparts in Member States X, Y and Z assess financial stability, steer monetary policy, or design other financial and economic indicators, etc. As emphasised by the EU Commission1, monetary policy, macro-prudential and micro-prudential policy should interact in a way that is conducive to the Single Market and not be detrimental to a level playing field, not only within the SSM area but across the EU as a

1 Martin Spolc, Gintaras Griksas & Carlos Maravall Rodriquez, Micro and macro dimensions of the banking union – what are the challenges for statistics, https://www.ecb.europa.eu/events/pdf/conferences/141015/Micro_and_macro_dimensions_of_the_BU_what_are_the_challenges_for_statistics-MSpolc.pdf?beee4351a680d05593f4d31330396e45

whole. Moreover, the Treaty on the Functioning of the European Union (TFEU) imposes a duty on the ECB to “contribute to the harmonisation, where necessary, of the rules and practices governing the collection, compilation and distribution of statistics in the areas within its field of competence” 2 The new approach which the ECB is proposing obviously fails to deliver the outcome which the TFEU requires. Individual Member States must not be authorised to collect granular credit and/or credit risk data which are not included in the European Reporting Framework package.

As a result, the roll-out of ERF should instead be organised as follows:

The new framework must be compulsory for both the banking and the central banking community.

Full harmonisation must be pursued: - national authorities should no longer be authorised to collect on a granular level

other credit or credit risk data in addition to those which are imposed at EU level;

- the timelines set should apply to all; - all data streams must adopt identical methods in respect of data remittance.

Central banks from all Eurozone Member States and non-Eurozone Member States need to become actively and closely involved in the Project as well.

b) The timing of the collection of granular data needs to be aligned to the development of the ERF/B.I.R.D.

The ERF aims at building a framework which would allow banks to generate, on the basis of transaction level data which are available in their operational systems, reports to various authorities in a highly automated and integrated way. To make this happen, models are being developed to make sure (i) that the raw data are automatically being placed in context and being added up in an appropriate way and (ii) that the information reaches those Authorities which need it, and only them. In the absence of such a model, it will be difficult for the industry to manage the reporting of the sheer volume of attributes which flow from the AnaCredit Regulation. - According to the approach which is being proposed, banks will reap the benefits only

at the very end of the exercise: their reporting burden will be reduced only if and when all the building blocks of the ERF will have been completed and implemented in full, which will take many, many years. In the meantime, banks will be faced with even more redundant and overlapping reporting requirements. This does not provide a fair or an appropriate incentive to banks to adapt their IT-systems.

- It is, moreover, obvious that AnaCredit can only properly function provided that a

common understanding of the precise meaning of the various data attributes has been reached. Our understanding is that one of the main objectives of the ERF and BIRD is exactly to achieve such a common understanding. However, this amounts to putting the carriage before the horse. It begs the question how banks can possibly be expected to already

2 See Article 5.3 of Protocol n° 4 to the TFEU “on the Statute of the European System of Central Banks and of the European Central Bank”.

start preparing the implementation of the AnaCredit framework in their IT-systems. Clearly, the output of the work which is currently being undertaken concerning the B.I.R.D. is the core output that needs to be reflected upon for inclusion.

Therefore, the timing of the collection of granular data needs to be revised to make sure that it becomes fully aligned to the development of the ERF/B.I.R.D. and a precise timescale needs to be elaborated for the introduction of the various building blocks of the granular dataset.

c) All lenders must be made subject to the new approach within the same timeframe

Considering that AnaCredit focuses exclusively on lending activities and the strong degree of interconnectedness of the banking sector with non-bank activities, there is no justifiable reason to exclude non-bank lenders from the scope of application of AnaCredit in a first stage. Data provided by banks only will merely provide public authorities with a partial view. To obtain a sufficiently broad and comprehensive picture, all lenders must be required to provide data, and not only the credit institutions.

The EU Treaty3 requires the ESCB to act in accordance with the principle of an open market economy with free competition – which implies that it is not authorised to contribute to creating an unlevel playing field between firms undertaking identical business activities on grounds which can merely be justified on the basis of pragmatic reasons. As we have explained above, the competitive distortions resulting from the AnaCredit framework will be significant considering the substantial investments which are needed to implement it. Such discriminatory treatment moreover violates the basic principle enshrined in Article 20 of the European Charter of Fundamental Rights saying that every person is equal before the Law. As a result, we can only concur with the opinion expressed by the EU Commission that “in order to get a broad and complete overview of credit exposures of the financial sector and associated credit risks, the reporting population should be extended, once possible, to ‘other financial corporations engaged in lending’.”4

d) The security and usage of granular data must be addressed first

No clarity exists today on the safeguards which will be put into place to ensure the security and appropriate usage of ERF data. Difficult questions about who obtains access to what data, for what purposes, in what contexts and with what constraints need to be answered. For example, as highlighted by the EU Commission, it is not clear who is responsible for the development and maintenance of the mentioned secure channels and if the needed

3 See Article 127. 4 Commission opinion of 7 August 2015 on the draft Regulation of the European Central Bank concerning the collection of granular credit and credit risk data, Official Journal n° C261 of 8 August 2015.

infrastructure is already in place5. The AnaCredit Regulation itself must include minimum safeguards so that the persons whose data have been retained have sufficient guarantees to effectively protect their personal data against the risk of abuse and against any unlawful access and use of that data6. A general reference, without further specification, to the EU Data Protection Directive cannot be sufficient. Setting up such a framework will require, amongst others, a careful examination of the specific circumstances under which the existing domestic data sharing frameworks can be extended to a wider amount of data covering the whole Eurozone for non-supervisory practices.

As long as AnaCredit does not meet those four basic principles referred to above, the Project aiming at collecting credit and credit risk data at a granular level will increase banks’ costs and their administrative burden in a way that it is out of proportion with the limited benefits that it may deliver both to banks, the central banking community and other data users. As a consequence, the banks fail to see any merit in the ECB already starting to collect credit and credit risk data on a granular level. Our Recommendation would be, therefore, for the ECB to organise the collection of the data which it is looking for in the old fashioned way and, going forward:

- to amend its proposals in a way to make them compliant with the four basic principles set out above;

- to continue its efforts to convince the EU central banking community that its proposals, as amended, are indeed the only sensible and most effective way forward within a Single Market for financial services;

- to continue, in cooperation with the industry, its modeling exercises which are currently being conducted within the framework of the ERF and the BIRD in the meantime;

- to report back to the public about progress which has been achieved in discussions held with the EU central banking community by means of an interim report to be published by 31 December 2016.

II. COMMENTS SPECIFIC TO THE DRAFT ANACREDIT REGULATION

Need for EU-wide Harmonisation 1. It is extremely disturbing to note that various members of the EU central banking

community and/or national central credit registers are maintaining or setting up a granular data collection framework concerning credit and credit risk data which is not aligned to the framework which the ECB is in the process of developing As explained above, it is essential that the EU Member States develop together with ECB a common reporting framework to collect credit and credit risk data: ultimately, full harmonisation across the EU needs to be achieved to ensure uniform solutions as to the required content (i.e. the number and definition of data attributes), the implementation

5 Ibidem. 6 Judgment of the Court of Justice of 8 April 2014 in Joined Cases C-293/12 and C-594/12.

timelines, the remittance dates and technical reporting solutions. It seems unacceptable to us that, within a Single Market for financial services, banking groups are being faced with disparate statistical reporting requirements in the various Member States where they conduct their business. Banks which are active in various Member States must be enabled to implement the new reporting framework across the whole group. Failing to do so, the AnaCredit Project will become a significant obstacle to the Single Market for financial services as it will contribute to a segmentation of markets and create significant competitive distortions.

2. The geographical scope of AnaCredit is limited to the SSM-zone. Other EU Member States

will merely be “encouraged” to consider adopting it. The extent to which AnaCredit will be extended across the EU, therefore, depends on goodwill in the absence of any legislative drive to that effect.

Ultimately, the Project will need to cover the whole single market, beyond the Banking Union. Extending AnaCredit to all EU Member States will, moreover, allow for the assessment of spill-over effects and ensure a smooth future enlargement of the SSM. Against this backdrop, we would like to suggest that Member States from outside the euro-zone be encouraged to adhere to the Project in a progressive manner on a voluntary basis.

Collection Process

- Our understanding is that AnaCredit reporting will not have an impact on supervisory reporting as long as those reporting streams will not have been integrated in the ERF/BIRD framework. As a result, banks will be faced with overlapping requirements.

- The draft Regulation and its annexes address the format of the information transfer between the national central banks and the ECB. The format of the information transfer from the reporting agents to their national central bank should also be identical to avoid international banking groups being burdened with possible variations concerning their interfaces with the various central banks.

- If a Member State would already be asking for all the information from a banks’ branch

which is situated in another Member State, the bank should not be obliged to report the same data twice (i.e. to the home and the host authorities). To avoid double reporting in such situations, it would seem appropriate that the NCB of the home country would centralise the data collection from foreign branches. As a consequence, Article 6 would need to be amended along the following lines:

“If the National CCR from the reporting agent´s country is already gathering information from EU branches, the home NCB shall send this information to the host NCB and to ECB.”

It needs to be observed, furthermore, that the host country GAAP may differ from the home country GAAP and that, as a result, accounting data fields from the home and foreign branches will have a different meaning. This is another reason why it seems advisable to use as much as possible information from the home Central Credit Register.

- Banks may not be authorised to provide data on business activities which they deploy in

third countries because of local law restrictions. During the AQR exercise, for instance, many European banks faced difficulties when trying to obtain loan-level data from non-EU subsidiaries (e.g. Mexico). Our understanding is that banks are authorised to restrain from reporting data which they are not authorised to pass on because of local law restrictions. The Explanatory Note should include wording confirming this. Does the Regulation provide protection to reporting agents on this issue?

- More clarity needs to be provided about the use that the various Member States will make of their national identifier. It also needs to be clarified, furthermore, how banks’ customers which are residents of non-Eurozone countries need to be identified.

- As far as the frequency of the reporting is concerned, shall data be reported on a month-end basis or are there any daily data flows to be reported?

- Mergers, divisions, reorganisations and new reporting agents: For reporting agents that

will have to report for the first time after the adoption of the Regulation, the temporary derogation to report statistical information should be extended to 18 months instead of 12 months so that reporting agents would have sufficient time to upgrade their IT systems and procedures to fulfil their obligations.

Step-by-step approach and future amendments - The statistical reporting environment needs to be stable and predictable. It would not be

helpful, therefore, if the AnaCredit would facilitate a process under which reporting templates would be continually modified or expanded. Reporting agents need to be provided with the global picture in order to build up a consistent IT architecture and optimize implementation costs.

- Recital 10 of the draft Regulation specifies that further reporting requirements may be implemented through a step-by-step approach vis-à-vis the reporting population, the coverage of counterparties’ sectors, the credit and credit risk data registered and the data attributes to be collected, as well as the collection of consolidated data. It adds furthermore that “for each subsequent Stage, the Governing Council will take its decision at least two years prior to its implementation.”

These decisions should only be taken after having observed due process requirements. Stakeholders need to be consulted to ensure that the reporting requirements are proportional and fit-for-purpose.

- We welcome the announcement made in the same recital that the provision of information

on housing loans to natural persons on the basis of sampling techniques will be explored.

- Article 21 of the draft Regulation provides for a simplified amendment procedure to allow the Executive Board to make “technical amendments to the annexes” of the Regulation. Our understanding is that this provision needs to be considered in conjunction with the ERF/BIRD exercise which may reveal practical issues of operationalising the requirements. We welcome the prospect that the ECB intends to draw on the feedback from these initiatives to review the data attributes sought. However, as explained above, the AnaCredit Regulation should only enter into force once the ERF/BIRD has finalised the modelling of the AnaCredit building block. As a result, the process which Article 21 organises is superfluous and even counter-productive to the extent that it suggests that AnaCredit reporting requirements are being introduced on a trial-and-error basis. If Article 21 would nevertheless be maintained, we would like to suggest that a fixed

revision frequency be set and that this be done in such a way that stressed reporting times

like year ends or even end of quarters be avoided.

Implementation timing - The entry into force of the AnaCredit Regulation in 2018 will not favourably influence

banks’ reporting burden immediately considering that the corresponding supervisory reporting requirements which the EBA has developed and which they need to comply with, will not have been abolished by then. As a result, banks will need to comply with the EBA requirements on top of the requirements imposed by the AnaCredit Regulation. The immediate impact of AnaCredit will, therefore, be that it will increase banks’ reporting burden. As extensively explained above, the AnaCredit Regulation should enter into force only once the work on the corresponding building block of the B.I.R.D. will have been fully completed.

- The draft Regulation states that the first transmission of data should take place with data from March 2018, with counterparty reference data from September 2017. However, NCBs may require data as early as 30 June 2017. This introduces the possibility of significant divergences across countries and uncertainty for pan-European entities. It is also only six months after the expected completion of the BIRD project.

- The AnaCredit Regulation should in any event not be implemented before the IFRS9 has become applicable in the EU to avoid that banks will need to make substantial revisions to their IT-systems.

Link with National Central Credit Registers Reporting streams to central credit registers need to be fully integrated into the AnaCredit reporting package to avoid duplication.

AnaCredit requirements need to observe the Principle of Proportionality - The AnaCredit Regulation will not only apply to significant institutions which are directly

being supervised by the ECB within the SSM framework but also to non-significant institutions which the ECB supervises merely indirectly. In the past, however, smaller and less complex institutions have repeatedly emphasised that there is a clear role for proportionality to play where supervisory and other reporting streams are concerned because it is essential to avoid that disproportionate costs are being imposed on them. Also the European Parliament has suggested that the ECB shall respect the principle of proportionality in the definition and imposition of statistical reporting requirements7.

- Derogations to small reporting agents must be set exclusively at EU level.

- The derogation criteria must be set on the basis of a careful assessment of the impact of

the additional burden which AnaCredit will bring to smaller entities. Feedback loop to reporting agents The rules concerning the feedback loop to reporting agents must be harmonised across the EU. As a consequence, the AnaCredit Regulation needs to specify which entitities precisley will be in a position to obtain access to the data and also to determine which data precisley they will be able to access.

Setting up a common framework concerning the feedback loop to reporting agents will inevitably require prior analysis of the data that can be distributed. Certain data regarding credit risk is high value information that banks obtained by using a large number of resources, and are based on expert judgment and internal tools and models. Lenders cannot be expected to share such proprietary with third parties, who should use their own information to take decisions. Pending work on harmonised rules concerning feedback loops, no cross border exchange of AnaCredit data should be allowed. As a consequence, Article 11 (5) needs to be removed.

Data Protection

- The Explanatory Note accompanying the Draft AnaCredit Regulation specifies no information on natural persons needs to be provided. It would be appropriate for the Regulation itself to explicitly confirm this.

- Many of the data attributes concern sensitive information. We welcome the draft Regulation for having confirmed that NCBs need to observe constraints linked to the confidential nature of the information.

7 P8-TA (2014) 0061 – Collection of statistical information by the European Central Bank -, 26 November 2014. http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P8-TA-2014-0061

- Because personal life is protected under the EU Charter of Fundamental Rights, it is far from certain that data concerning households can be lawfully collected in a granular way. This is a matter that needs to be clarified from the very outset as it may have a profound impact on what the European Reporting Framework is able to achieve. If it would appear that data concerning households can only be collected by using sampling techniques, the dataset will no longer be comprehensive and may, as a result, no longer be in a position to satisfy the data requirements of the banking supervisory community.

- The retention period of the data stored in Anacredit needs to be compliant with national

retention periods which are often legally imposed.

III. COMMENTS ON THE DATA ATTRIBUTES

General comments A range of data which banks will be expected to report are currently not available within their IT-systems because they are not relevant to their business, such as: the number of employees working for the borrower; the borrower´s total balance sheet or its annual turnover; the accounting standard used by the reporting agent.

Public authorities should in any event try and find ways to collect the data concerned by other means, where possible from existing databases, to minimize the cost of data collection for the industry. Public authorities could also put to use data stored in national business registers to retrieve such supplementary information. NCBs should not merely be allowed but be obliged to use their own databases, data already received from reporting agents and any other sources where supplementary non-credit information is concerned.

Clarifications needed

- Several central banks have informed their banking community that they are determined to implement the AnaCredit requirements in line with current national practices. We wonder how the collection of data which, as a consequence, will not be comparable across Member States can possibly contribute to supporting the ESCB and the ECB in the performance of its tasks, which is supposed to be the very objective of the AnaCredit Regulation.

Such an approach can in any event not be reconciled with the autonomy of concepts of Community Law and the principle of equality: the terms of a provision of Community Law which makes no express reference to the law of the Member States for the purpose of determining its meaning and scope must be given an independent and uniform interpretation throughout the Community8. As a result, the precise meaning of the various attributes included in the AnaCredit Regulation must be defined at EU level.

- Article 6 states that the reporting will be submitted on an individual basis. It does not

specify; however, the accounting standard to be used within this framework. To leverage

8 Judgment of the Court of 18 January 1984, Case 327/82.

on IT architecture submission set up for FINREP purposes, it would seem logical to require banking groups to report Anacredit data attributes under IFRS instead of local GAAP.

- The Regulation should provide a clear definition of the various concepts to which it refers,

including the concepts of “contract” and “Instrument.” Ideally, those definitions should, moreover, be clarified by means of examples for each product type. The Explanatory Note should, for instance, provide an example indicating that, for a straight loan under which several drawings are done with different characteristics (different interest rates, maturity dates…)

- the credit line should be reported in the Contract Table; - the individual drawings under this line should be reported in the Instrument Table. - the undrawn portion (off-balance sheet amount) under the credit line should also be reported in the Instrument Table.

Many of these issues are being addressed through the B.I.R.D. project but, as noted above, a number of NCBs are pursuing different approaches.

- Concerning counterparty reference data, the following needs to be clarified:

- Address city area / district: what exactly should be mentioned in this field? Please provide list of values for different countries.

- National identifier: which code should be mentioned for the various countries, for incorporated entities? Should it always be the VAT number?

- Date of initiation of legal proceeding: is this the date of legal proceedings initiated g by the reporting bank, or initiated by any other creditor of the counterparty?

- Article 9 states that the reporting agents shall inform NCBs of any changes to reference

data. What is meant by changes?

- We don’t have clarity on the concept of counterparty when it refers to subsidiaries: do we have to report exposures with our subsidiaries or only with branches? Do branches and counterparties have the same treatment under AnaCredit?

- Concerning instrument data, the following needs to be clarified:

- Repayment rights how to report credit lines which can be terminated by the bank with e.g. 3 months notice ONLY if specific contractual conditions are met (e.g. customer is past due more than x days)?

- Payment frequency: how to report whenever the frequency of principal payments differs from frequency of interest payments?

- Correlation product: as derivatives are not in the scope of the draft Regulation, we question the relevance of requiring this data.

- Which date needs to be mentioned concerning the attributes “Settlement date” and "Legal final maturity date" for current accounts? Our understanding is that “settlement date“ refers to the date at which loans can be withdrawn by the debtor for balance sheet items. Regarding off balance sheet items we understand the settlement date to be the inception date i.e. the date on which the bank is engaged irrevocably in the contract.

- Does Annex I, 2.3. imply that internal transactions within the legal entity need to be

reported?

- It would be helpful if the treatment of off-balance sheet items would be clarified. - How should encumbrances on a loan-by-loan basis be reported? Assume we have pledged

a portfolio of loans with an outstanding amount of 10 bn (7 bn after avg 30% haircut) and only use 3 bn of ECB cash, then only 3 bn / 0,7 = 4,3bn (in terms of outstanding amount before haircut) of the 10 bn pledged portfolio is encumbered. If we flag all the loans in the 10bn pledged portfolio as "Central bank funding", then this gives a false indication (overestimate) of the total amount encumbered.

The same issue arises if we have a bond position of e.g. 500 mio EUR, and repo out a fraction of this position e.g. 100 mio EUR. If we flag the 500 mio bond position as "Repurchase agreements other than to central banks", then this largely overestimates the amount encumbered.

Finally, a bond position could have different sources of encumbrance (for different pieces of the bond position). Which source should we then indicate in this data attribute?

- Accumulated Write-offs: our understanding is that write-offs for partially written-off exposures need to be reported. However, exposures which have completely been written-off are no longer on the balance sheet, and therefore are not reported anymore in AnaCredit.

Should write-offs which have been accumulated during the reporting year be reported, or also write-offs from previous years? Accumulated impairment amount: is it the impairment amount under IFRS that needs to be reported or the impairment amount under Local GAAP? Carrying amount: is it the carrying amount under IFRS which needs to be reported or the carrying amount under Local GAAP?

Instrument protection received data - Protection allocated value : we understand this data as being the amount of the protection received further prioritization, allocation and capped to the outstanding amount of the loan (as reported for COREP purposes)

Which non-performing loans need to be reported? Does the requirement include cards, credit lines, etc., or only loans specifically?

Other comments

- The Accounting classification needs to be reviewed considering that IFRS9 will come into force on 1 January 2018. AFS, HTM should be removed.

- Date of initiation of legal proceeding: "Cumulative recoveries since default" can only be captured at high cost.

- We would like to suggest that for some tables a full inventory should be provided once, and after this initial upload only the updates should be delivered on a monthly or quarterly basis.

Furthermore, tools should be made available to banks allowing them to verify on a regular basis that the inventories in the AnaCredit database are still correct after monthly/quarterly updates have been uploaded.

- Institutional sector: we note that the list of institutional sectors is not in line with other statistical reporting requirements such as CBS/BIS, for future I-A required by the FSB or for EBA reporting. This lack of alignment of the counterparty classification creates an unnecessary administrative burden for reporting agents within the framework of their third party referentials data base. The counterparty sector used for CBS or for FINREP should, therefore, be used instead.

- Balance sheet recognition: we question the relevance of this data as securities are excluded from the regulation (cf. transferred amount above). In addition should the loan is derecognised, it is not part of the balance sheet anymore. The reporting is on a stock basis and not on a flow basis.

- Status of forbearance and renegotiation: we understand the need for reporting the

forborne status as required by FINREP (680/2014), but we question the relevance of the renegotiation status, out of the Regulation 680/2014 that defines only forbearance. Does it mean commercial renegotiation only are concerned? (renegotiation of the loans in a low rate environment)

- Banks should have at their disposal an emergency procedure through which they can resend a full inventory to cater for the situation in which updates can no longer reflect the correct situation.

- On page 30 of the draft Regulation (Annex III – Counterparty reference data) mentions

that “Where the counterparty is covered by more than one description in Table 2, the conditions must apply in the following way: the most onerous reporting requirement of columns 1 and 2 in Table 2 must be reported unless the attribute is not required to be reported in accordance with columns 3 and 4.” We presume that this is an error and the word “most” needs to be replaced “least”.

- The requirement to report on “Fiduciary instruments”” is questionable considering that it does not seem relevant for statistical purposes.

- The requirement to report on the “transferred amount” ”is questionable considering that it does not seem relevant for statistical purposes.

- Is it required, to determine if the reporting threshold has been met, to aggregate loan exposures to a single counterparty even if those loans have been contracted in more than one Member State. Example: a client has two loans, one of 10.0000 EUR in a bank

established in a Eurozone country and another of 16.000 in the branch located in another Eurozone country. Is there a reporting requirement?

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