EBA Publishes Discussion Paper on Centralised Pillar 3 Disclosures
As we have written here before, the Basel III requirement for banks to publish a range of safety and soundness data — a summary of the prudential data they disclose to central banks and regulators — has largely been a failure.
Not because investors, counterparties and even depositors won’t benefit from that information.Instead, it’s because (a) the data has almost universally been published as “paper under glass” (ie: PDF) which makes it extremely hard to use and (b) the data has been published on relatively obscure parts of corporate websites, which makes it hard to discover. Pulling together usable and comparable data has been both difficult and expensive.
In Europe the EBA is set to change all that. In a discussion paper published yesterday, the European Banking Authority sets out its plans to publish this data in a machine readable format (the quantitative data will be in xBRL-CSV) and to publish all bank Pillar 3 disclosures in one place — in a new central hub at the EBA. In due course, the EBA plans to make the information available in the upcoming ESAP portal.
The EBA’s proposals go further, with plans incorporating the use of Verifiable LEIs (or vLEIs) to permit zero-trust authentication. It would be the first regulatory application of the vLEI to date, and bring to fruition the Proof of Concept described at Data Amplified in October by the EBA’s Head of IT, Radu Burghelea
These proposals are not without some challenges. Indeed, the purpose of the Discussion Paper is to seek feedback on a range of questions that have been identified and to discover others that have not yet been set out. That said, the EBA is to be congratulated for the vision and clarity that it sets out in the paper, not least the proposed use of the vLEI. Your input is essential! We’d encourage anyone interested in this approach to enhanced transparency and analytics to respond. Input by the end of March 2024 please!
