EBA欧洲银行-EBA-REC-2014-01-28Recommendation-on-the-use-of-the-Legal-Entity-Identifier29_22页_703kb

Summary of EBA/REC/2014/01: Recommendation on the Use of the Legal Entity Identifier (LEI)

Core Content

The European Banking Authority (EBA) has issued a Recommendation on the use of the Legal Entity Identifier (LEI) to support the adoption of a global, standardized system for identifying legal entities in financial transactions. This recommendation is part of the EBA's efforts to ensure uniform supervisory reporting across all EU Member States, as required by the Capital Requirements Regulation (CRR). The goal is to enhance supervisory convergence, data comparability, and operational efficiency by using a single, supranational identifier for financial institutions.

Main Points

• LEI System: The EBA supports the Global Legal Entity Identifier System (GLEIS), proposed by the Financial Stability Board (FSB) and endorsed by the G20. The LEI system aims to provide a unique worldwide identification of financial entities.
• Pre-LEIs: Since the full GLEIS is not yet operational, pre-LEIs issued by pre-LOUs (pre-endorsement Local Operating Units) that have been endorsed by the Regulatory Oversight Committee (ROC) are recommended for use in supervisory reporting.
• Implementation Timeline:
  • Institutions under supervisory remit must obtain pre-LEI codes by 31 March 2014 for those included in the EBA's sample.
  • All other institutions must obtain pre-LEI codes by 31 December 2014.
• Reporting Requirements: Competent authorities are required to request pre-LEI codes from all institutions under their supervision and ensure that the data they submit to the EBA includes these codes.

Key Considerations

• Reasons for Recommending LEI:
  • It aligns with a global initiative and supports supervisory convergence.
  • It offers high-quality, reliable, and comparable data.
  • It is compatible with existing IT systems and can be integrated into XBRL templates with minimal effort.
  • It is already being used by many banks, especially in the US, and is expected to become de facto mandatory in the EU.
• Alternative Systems Considered:
  • MFI ID: Only used in the euro area for monetary operations and not legally binding.
  • BIC/SWIFT: Mainly used for transaction identification but not always accessible to supervisors.
  • New EBA system: Not viable due to long-term costs and complexity for NSAs.
• Cost-Benefit Analysis:
  • Direct costs are minimal, with an average registration fee of €129 and annual maintenance of €74.
  • Indirect costs include system integration and data standardization, but these are considered negligible in comparison to the benefits.
  • Benefits include data harmonization, operational efficiency, and reduced manual intervention.
  • The net impact is positive for all stakeholders, including banks, EBA, NSAs, and pre-LOUs.

Supporting Documents

• Cost-Benefit Analysis / Impact Assessment:
  • Highlights the low cost and high benefit of adopting the LEI system.
  • Notes that the LEI system is already in use by many financial institutions.
  • The net impact is considered positive for all parties involved.
• Views of the Banking Stakeholder Group (BSG):
  • The BSG supports the EBA's recommendation but raises concerns about smaller banks with limited IT infrastructure.
  • They emphasize the importance of compatibility with global LEI standards.
• Feedback on Public Consultation:
  • The consultation received 17 responses, of which 15 were published.
  • Most respondents agreed with the recommendation, highlighting the cost-effectiveness and operational benefits of the LEI system.
  • Some expressed concerns about costs and timelines, but these were addressed by the EBA.

Conclusion

The EBA recommends the adoption of the LEI system for supervisory reporting in the EU, using pre-LEIs as an interim solution. This recommendation is based on the global consensus, operational benefits, and minimal costs. The implementation timeline is considered feasible, and the system is scalable to handle increased demand. The EBA expects all competent authorities to incorporate this recommendation into their supervisory practices to ensure consistent, reliable, and comparable data for regulatory purposes.