Official Journal of the European Union
DECISION OF THE EUROPEAN CENTRAL BANK
of 24 February 2014
on the organisation of preparatory measures for the collection of granular creditdata by the European System of Central Banks
THE GOVERNING COUNCIL OF THE EUROPEAN CENTRAL BANK,
Having regard to the Statute of the European System of Central Banks and of theEuropean Central Bank, and in particular Article 5 and Article 46.2 thereof,
Having regard to Council Regulation (EC) No 2533/98 of 23November 1998 concerning the collection of statistical information by theEuropean Central Bank (1), and in particular Article 8(5) thereof,
Having regard to the contribution of the General Council,
Granular credit data comprise individual items of information about creditexposures of credit institutions or other loan-providing financialinstitutions vis-à-vis borrowers. Non-aggregated data of this type may becollected, subject to adequate confidentiality safeguards, on aborrower-by-borrower or loan-by-loan basis from credit registers operated bythe national central banks (NCBs) of the European System of Central Banks(ESCB) (hereinafter ‘central credit registers’ or ‘CCRs’), or from other granular data sources,including credit registers, or alternative statistical collections. A numberof NCBs that operate CCRs share granular credit data with each other for thepurpose of passing such data on to reporting institutions and facilitating amore comprehensive overview of the indebtedness of borrowers (2).
Article 5 of the Statute of the European System of Central Banks and of theEuropean Central Bank (hereinafter the ‘Statute of the ESCB’) specifies that, in order toundertake the tasks of the ESCB, the European Central Bank (ECB), assistedby the NCBs of the ESCB, collects the necessary statistical informationeither from competent national authorities or directly from economic agents.Moreover, Article 8(5) of Regulation (EC) No 2533/98 allows the ECB todecide on the collection and transmission, to the extent and level of detailnecessary, within the ESCB of confidential information originally collectedfor purposes other than those of Article 5 of the Statute of the ESCB,provided that this is necessary for the efficient development or productionof statistics or for increasing their quality, and that these statistics arenecessary for the performance of the tasks of the ESCB referred to in theTreaty on the Functioning of the European Union.
Granular credit data based on CCRs and other available credit data sourcesare necessary for: (a) the development and production of new ESCB statisticsin areas such as statistics on impaired assets, provisioning for impairedassets and revaluation reserves and statistics on loans to non-financialcorporations, broken down by the size of the corporations concerned; (b)increasing the quality of existing ESCB statistics in areas such asstatistics on credit lines broken down by counterparty sector, on loans tonon-financial corporations broken down by economic activity, and on loansbacked by real-estate collateral. These new or improved statistics to beproduced in the long term are necessary for the performance of Eurosystemtasks including monetary policy analysis and monetary policy operations,risk management, financial stability surveillance and research, as well asthe Eurosystem's contribution to the smooth conduct of policies pursued bythe competent authorities relating to the prudential supervision of creditinstitutions and the stability of the financial system.
A long-term framework for the collection of granular credit data based onharmonised ECB statistical reporting requirements should be set out in anECB legal instrument to be adopted under Article 5 of the Statute of theESCB, which should be submitted to the Governing Council in due time so asto ensure that by the end of 2016: (a) national granular credit databaseswill be operated by all Eurosystem NCBs in accordance with specified minimumstandards developed during the preparatory phase, and (b) a common granularcredit database shared between the Eurosystem members and comprising inputdata for all Member States whose currency is the euro will be established onthe basis of such national granular credit databases, with the aim ofensuring, in a stepwise manner, the availability of credit statisticsnecessary for the performance of Eurosystem tasks, including in particularcontributing to the smooth conduct of policies pursued by the competentauthorities relating to the prudential supervision of credit institutionsand the stability of the financial system. This long-term ECB legalinstrument should also define the date, no later than the date specifiedabove, from which the collection of granular credit data based on harmonisedECB statistical reporting requirements should commence. Although a broaddesign of the content of the future granular credit data to be collectedunder such harmonised ECB statistical reporting requirements is set out inthe reference reporting scheme annexed to this Decision, the exact scope andcontent of the data to be collected under the long-term framework is stillto be defined. Preparations for the establishment of this long-termframework will be carried out through preparatory measures implemented underthis Decision that have the following aims: (a) definition of a core groupof harmonised granular credit data sets that are to be provided to the ECBby the NCBs in the long term, (b) identification and evaluation of relevantuser needs concerning the application of granular credit data within theESCB in the long term, (c) estimation of related costs generated bycollection, quality assurance and data sharing procedures, (d) gradualelimination of data gaps related to incompleteness or lack of granularcredit databases in some Member States, (e) definition of the appropriategovernance and organisational aspects for the operation of the long-termframework, and (f) ensuring better interoperability and data reuse amongCCRs, credit registers and other relevant credit databases meeting thequality criteria.
The Statistics Committee (hereinafter the ‘STC’) of the ESCB should bemandated by the Governing Council to assist it in the implementation ofthese preparatory measures. The STC should in particular organise the annualtransmission from the NCBs to the ECB of available granular credit data aspart of the process of ensuring proper alignment of such granular creditdata to be collected in the long term with the prospective ESCB user needs.For this purpose, ESCB users not benefiting from the derogation underArticle 3(3) of this Decision may be granted access to confidentialstatistical information derived from any granular credit data transmitted tothe ECB until a long-term framework is implemented, in accordance with therelevant confidentiality safeguards.
Equal treatment of individual NCBs should be the guiding principleunderpinning the preparatory measures for the long-term framework. Thenecessary minimum criteria as regards the scope, the upper and lower boundsof layers or strata across the borrowers' population and the other possiblebreakdowns, the level of detail of data attributes and the quality ofcollected granular credit data shall be proposed to the Governing Councilfor all Eurosystem NCBs in the course of the preparatory phase. Disparitiesbetween data sets delivered by individual NCBs will be identified andprogressively reduced through adjustments introduced with subsequent datadeliveries made under this Decision. At the same time, certain EurosystemNCBs may require a longer phase-in period in the preparatory phase fordeveloping or obtaining access to comprehensive granular credit databases.These NCBs should, during the preparatory phase, be permitted to benefitfrom temporary derogations from the obligation to apply specific preparatorymeasures developed by the STC, provided that the period of each specificderogation is strictly limited to the minimum time necessary for the NCBconcerned to achieve during the preparatory phase compliance with thepreparatory measures covered by the derogation, and that such period is inany event set in a manner that allows the objectives laid down in Article 1to be achieved in relation to all Eurosystem NCBs.
In accordance with the case law of the Court of Justice of the EuropeanUnion, both the Treaties and the law adopted by the Union on the basis ofthe Treaties have primacy over the national law of Member States, under theconditions laid down by that case law (3). Accordingly, implementation of this Decision will not result in abreach of provisions of national law imposing specific confidentiality orreciprocity requirements in relation to cross-border sharing of datacollected through CCRs.
It is necessary to set up a procedure to carry out technical amendments tothe Annex to this Decision in an effective manner, provided that suchamendments neither change the underlying conceptual framework nor affect thereporting burden. NCBs may propose such technical amendments to the Annexthrough the STC, whose view will be taken into account when following thisprocedure.
The provisions of this Decision may be extended to apply to the NCBs ofMember States whose currency is not the euro by means of those NCBs enteringinto cooperation with the Eurosystem central banks on the basis of an ECBrecommendation,
HAS ADOPTED THIS DECISION:
Scope and objectives
This Decision defines preparatory measures which are necessary to establish in astepwise manner a long-term framework for the collection of granular credit databased on harmonised ECB statistical reporting requirements. This long-term frameworkshall include by the end of 2016: (a) national granular credit databases operated byall Eurosystem NCBs, and (b) a common granular credit database shared between theEurosystem members and comprising granular credit data for all Member States whosecurrency is the euro.
For the purposes of this Decision:
‘central credit register’ (CCR) means a creditregister operated by an NCB of the ESCB;
‘credit register’ means a register that collectsgranular credit data from reporting institutions;
‘granular credit data’ means information about creditexposures of credit institutions or other loan-providing financialinstitutions vis-à-vis borrowers, provided on a borrower-by-borroweror a loan-by-loan basis.
Organisation of preparatory measures
1. Preparatory measures to be undertaken in order to achieve the objectivesset out in Article 1 shall include:
identifying relevant user needs and estimating related costsgenerated by proposals for the collection, quality assurance anddata sharing procedures to be applied in the long term;
defining and improving the granular credit data sets to becollected under the long-term framework, in particular regardingthe scope, the bounds of layers or strata in the borrowerpopulation and the other possible breakdowns, the level ofdetail of the data attributes and the quality of granular datacollected;
organising the transmission of granular credit data in thepreparatory phase in accordance with Article 4 and setting thequality standards which granular credit data obtained from CCRsor other credit registers need to comply with prior to thecommencement of such transmission;
developing detailed operational arrangements specifyingtransmission, compilation, storage and use of the granularcredit data that are to be tested and fine-tuned in thepreparatory phase with a view to their subsequent incorporationin the long-term framework;
establishing a timetable for specific steps and deliverables tobe completed by the individual NCBs and the ECB, including stepsto be taken by the NCBs not presently having access tocomprehensive granular credit databases, with a view toobtaining such access through development of an own CCR or byother means;
monitoring the progress achieved in respect of the measureslisted in points (a) to (e), and identifying relevantadjustments if needed.
2. The STC shall, taking into account advice from other relevant ESCBcommittees as appropriate, prepare the decisions necessary for implementing thepreparatory measures set out in paragraph 1 and submit them for adoption to theGoverning Council. The STC shall report to the Governing Council on an annualbasis on the progress achieved by the ECB and the individual NCBs.
3. With regard to NCBs which require a longer phase-in period during thepreparatory phase for developing or obtaining access to comprehensive granularcredit databases, the Governing Council may, during the preparatory phase grantindividual temporary derogations from the obligation to apply specificpreparatory measures defined under paragraph 1. The period of each individualderogation shall be strictly limited to the minimum time necessary for the NCBconcerned to achieve during the preparatory phase compliance with thepreparatory measures covered by this derogation, and shall in any event be setin a manner that allows the objectives laid down in Article 1 to be achieved inrelation to all Eurosystem NCBs. During each period of derogation the NCBconcerned shall report twice a year to the STC on its progress in achieving fullcompliance with the preparatory measures covered by the derogation. Any rightsof access to confidential statistical information derived from granular creditdata transmitted to the ECB as part of a specific preparatory measure shall besuspended in relation to any NCBs benefitting from a temporary derogation inrelation to this measure. The Governing Council may decide that appropriatefurther restrictions are to be imposed on individual NCBs benefitting from anyderogation under this paragraph.
Transmission of granular credit data in the preparatory phase andconfidentiality safeguards
1. To ensure proper alignment of the granular credit data to be collected inthe long term with the statistical needs of prospective ESCB users, the STCshall, during the preparatory phase, organise the annual transmission from theNCBs to the ECB of readily available granular credit data, related to 30 Juneand 31 December, using an adequate level of anonymisation and aggregationconcerning the information about the borrowers so as to ensure that individualborrowers cannot be identified. The first transmission shall occur at the end ofMarch 2014, with reference to 30 June and 31 December2013, and shall be based on the reference reporting scheme set out inthe Annex. Any further transmissions shall be organised by the STC on the basisof the reporting scheme which will take account of the existence of readilyavailable granular credit data and their characteristics, and ensure that thedata collected are proportionate to the status of the preparatory work completedat the time of transmission. Data on borrowers belonging to institutionalsectors other than non-financial corporations may be reported during thepreparatory phase on an aggregated basis, provided that the NCB deliversrelevant methodological information.
2. Individual NCBs shall transmit the requested granular credit data on thebasis of the CCRs or other available granular credit databases. The NCBsbenefitting, pursuant to Article 3(3), from a derogation from preparatorymeasures under Article 3(1)(c) with respect to specific data transmissions shallinclude information about their progress in achieving full compliance with thedata transmissions requested during the preparatory phase in their reporting tothe STC.
3. Data provided to the ECB pursuant to the first paragraph shall betransmitted in electronic form via secured remote access and stored in a securearea. Access to such data shall be limited to statistical experts included onthe list communicated by the STC to the Governing Council prior to initiation ofthe transmission. The ECB shall include information on the security measurestaken in the annual confidentiality report.
Use of statistical information derived from granular credit data in thepreparatory phase
1. Data provided to the ECB pursuant to Article 4 shall be used to: (a) defineand improve the granular credit data to be collected under the long-termframework and the respective data attributes, and (b) define and produceaggregated statistical information to meet the statistical needs of the ESCBusers during the preparatory phase.
2. In addition to the access and use of aggregated statistical information,users within the ESCB not benefitting from a derogation under Article 3(3) mayrequest permission to access and use disaggregated confidential statisticalinformation derived from granular credit data transmitted pursuant to Article 4,provided that such access to confidential statistical information: (a) servesthe objective of defining and improving the granular credit data to be collectedunder the long-term framework and the respective data attributes, and (b) doesnot involve direct access to original granular credit data collected by the NCBsor the ECB. Each user request shall be accompanied by a list of individualpersons who will have access to the information concerned.
3. The user requests made under paragraph 2 shall be subject to assessment andapproval by the Governing Council in accordance with the procedure adopted bythe ECB. The STC shall assist the Governing Council in the evaluation of suchrequests.
Simplified amendment procedure
Taking account of the views of the STC, the Executive Board of the ECB shall beentitled to make technical amendments to the Annex to this Decision, provided thatsuch amendments neither change the underlying conceptual framework nor affect thereporting burden. The Executive Board shall inform the Governing Council of any suchamendment without undue delay.
1. This Decision shall take effect on the day of its notification.
2. By 31 December 2014 the Governing Council shallreceive a report analysing: (a) the status of the preparatory measuresestablished by this Decision, and (b) the feasibility of replacing this Decisionwith an ECB legal instrument setting out harmonised ECB statistical reportingrequirements and ensuring the establishment of a common granular credit databaseshared between the Eurosystem members and comprising granular credit data forall Member States whose currency is the euro, including an assessment of thefeasibility of the timeline for the adoption of these measures as laid down inArticle 1, in view of the progress achieved.
This Decision is addressed to the NCBs of Member States whose currency is theeuro.
Done at Frankfurt am Main, 24 February 2014.
The President of the ECB
(1) OJ L 318,27.11.1998, p. 8.
(2) Memorandum of Understanding on the exchange of information amongnational central credit registers for the purpose of passing it onto reporting institutions, available on the ECB's website atwww.ecb.europa.eu
(3) Declaration 17 concerning primacy, annexed to the Final Act of theIntergovernmental Conference which adopted the Treaty of Lisbon, of13 December 2007 (OJC 115, 9.5.2008, p. 344).
REFERENCE REPORTING SCHEME
Granular credit data reported on a solo basis as set out in the table below, and including the following information:
‘lender attributes’, describing the credit institution or other financial institution which granted the loan;
‘borrower attributes’, describing the non-financial corporation or any other borrower who took out the loan;
‘credit data variables’, describing the loan agreement and the status of the loan in a qualitative manner;
‘credit data measures’, providing numerical values which can be further aggregated (quantitative indicators) and reported as end-of-period figures.
Level of anonymisation
Identification of lenders in accordance with the codification used by the ESCB Register of Institutions and Affiliates Database (RIAD) (1).
Alphanumeric identification of borrowers, to ensure that individual borrowers cannot be identified
Country of residence
Country of residence of the borrower, in accordance with the ISO 3166 standard (2).
Institutional sector (or subsector) of the borrower, in accordance with the ESA 95 classification. The following (sub)sectors are required:
Money market funds
Other financial intermediaries, except insurance corporations and pension funds
Insurance corporations and pension funds
Households and non-profit institutions serving households
Sector of economic activity
Classification of (financial and non-financial) borrowers according to their economic activities, in accordance with the NACE rev.2 statistical classification (3). NACE codes shall be reported with a two level detail (by ‘division’).
Classification of borrowers according to their size: micro, small, medium-sized and large.
Credit data variables
Alphanumeric identification of loans, as used by the reporting institutions at national level.
Currency denomination of loan, in accordance with the ISO 4217 standard (4).
Type of loan
Classification of loans according to their type:
On demand (call) and short notice (current account)
Credit card debt
Reverse repurchase loans
Other term loans
Type of collateral backing the loan granted; real estate collateral, other collateral (including securities and gold), no collateral.
Maturity of the loan agreed at the inception or at a date of later renegotiation; less than or equal to one year, more than one year.
Maturity referring to the agreed time of redemption of the loan; less than or equal to one year, more than one year.
Loans where the borrower is in default.
Single loan agreement in which several institutions participate as lenders.
Subordinated debt instruments provide a subsidiary claim on the issuing institution that can only be exercised after all claims with a higher status (e.g. deposits/loans) have been satisfied, giving them some of the characteristics of ‘shares and other equity’.
Credit data measures
Total outstanding amount of a loan (principal amount, without deducting write-downs), reported gross of credit risk adjustments, except credit losses recorded as write-offs.
Amount of credit granted but not drawn.
Any payment (amount) on a loan which is overdue by more than 90 days.
Value of collateral at the time of reporting.
Specific credit risk adjustment
Specific loan loss provision for credit risks in accordance with the applicable accounting framework. Such measure must be reported only for non-performing loans.
Risk-weighted exposure amounts in accordance with Directive 2006/48/EC of the European Parliament and of the Council (5) or successive acts.
Probability of default (only for credit institutions applying an internal ratings-based approach)
Probability of default of a counterparty over a one-year period, in accordance with Directive 2006/48/EC or successive acts. For borrower-by-borrower reporting, a volume weighted average is reported.
Loss given default (only for credit institutions applying an internal rating based approach)
Ratio of the loss on an exposure due to the default of a counterparty to the amount outstanding at default, in accordance with Directive 2006/48/EC or successive acts. For borrower-by-borrower reporting, a volume weighted average is reported.
The ratio, as a percentage per annum, of the amount that a debtor has to pay to the creditor over a given period of time to the amount of the principal of the loan, deposit or debt security, in accordance with Regulation (EC) No 63/2002 of the European Central Bank (6) or successive acts. For borrower-by-borrower reporting, a volume weighted average is reported.
(1) For monetary financial institutions (MFIs), see the list published on the ECB's website at www.ecb.europa.eu
(2) As published by the International Organization for Standardization (ISO) on its website at www.iso.org
(3) As published by the European Commission (Eurostat) on its website at www.ec.europa.eu/eurostat
(4) As published by the International Organization for Standardization (ISO) on its website at www.iso.org
(5) Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions (OJ L 177, 30.6.2006, p. 1).
(6) Regulation (EC) No 63/2002 of the European Central Bank of 20 December 2001 concerning statistics on interest rates applied by monetary financial institutions to deposits and loans vis-à-vis households and non-financial corporations (ECB/2001/18) (OJ L 10, 12.1.2002, p. 24).