On 18 May 2016 the Governing Council of the European Central Bank adopted the regulation of the collection of granular credit and credit risk data (ECB/2016/13). The data is to be collected in a common register, known as the Analytical Credit and Credit Risk Dataset (AnaCredit). AnaCredit is a major European System of Central Banks (ESCB) project and one of the largest projects undertaken by the statistics team of ECB. Such a common granular database is a step in improving detailed, more accurate and timely statistical information on individual loans and credit risks in the euro area, harmonized across all the Member States. Member States whose currency is not the euro may decide to become a reporting Member State on a voluntary basis by incorporating the AnaCredit regulation into their national law.
Earlier this year, the German banking industry estimated that the AnaCredit project would cost smaller banks millions of euros to comply with, and larger banks up to EUR 50 million. The data required by AnaCredit will result in changes in reporting systems, credit databases and processes and, in some cases, subsequent data collection exercises to provide the requested data. Several additional reporting requirements introduced by national authorities have also an impact on required databases. As AnaCredit overlap with other regulatory reporting requirements (e.g. IFRS 9, BCBS239, FinRep, CoRep), a holistic approach towards the credit data architecture will definitely save time and cost in the future.
The monthly and quarterly reporting under the AnaCredit regulation shall start in September 2018. Small banks, however, will be able to report on a quarterly basis for a transitory period of two years. National central banks (NCBs) are allowed to collect the information to be transmitted to the ECB as a part of a broader national reporting framework and using their own databases.
For ensuring the appropriate identification of counterparties, NCBs shall transmit to the ECB a first set of the counterparty reference data six months prior to the first transmission (March 2018) and NCBs may require partial or complete reporting of counterparties reference data and credit data from 31 December 2017 onwards.
Due to the significant heterogeneity of the current credit data collection across participating countries, AnaCredit will be established in stages. The first stage of reporting under AnaCredit includes only loans and deposits from all credit institutions. Credit granted to natural persons and other financial corporations will be included in the actual reporting population in a subsequent stage and the scope of granular reporting will later be extended to derivatives, other accounts receivable and off-balance sheet items (such as financial guarantees). The scope and content of the data to be collected in a subsequent stage will be decided by the ECB Governing Council at least two years prior to their implementation.
The ECB’s aim is to use the detailed information not only for monetary policy but also for macro and micro prudential supervision. In the context of the Single Supervisory Mechanism (SSM) – the value add of a loan tape style database for this tasks is obvious.
For banks the data required by AnaCredit will result in changes in reporting systems, credit databases and processes and, in some cases, subsequent data collection exercises to provide the requested data. Several additional reporting requirements introduced by national authorities have also an impact on required databases.
Aside from significant cost and effort, the implementation of AnaCredit brings banks the chance to perform detailed analysis of their risk profile and fine-tune their credit risk models. However, the supervisory use of that data also requires a proper management.
Several high level analyses and pre-studies supported by KPMG firms have been conducted across the Member States which show that some banks are still in the early stages of their AnaCredit implementations. If you are interested in sharing and receiving insights of AnaCredit please contact the KPMG ECB Office.