EBA’s Data Point Model: A reporting game changer for management information
By Selwyn Blair-Ford - Head Of Global Regulatory Policy at Wolters Kluwer Financial Services’ FRSGlobal
On the 25th May the European Banking Authority (EBA) published a consultation paper asking for comment on design of its data collection model – AKA the Data Point Model (DPM). The paper and associated documentation detail a proposal of how financial and prudential data collected from the European banking sector will be organised and made available for the regulator to analyse. The model resembles a large multi-dimensional data cube, where each collected piece of data will be referenced in terms of several dimensions, allowing accurate and fast location of specific data points. Each data point will have a number of properties giving more insight into its meaning. This model combined with modern database tools will enable the regulator to “slice and dice” data from the whole European banking sector.
Clearly this will not only aid the regulation of individual firms, as required by the FSA and other national regulators, but it will also give the regulatory authorities a tool to address systemic industry-wide issues, something that has been called for time and time again in light of the financial crisis. Furthermore, the regulator will be able to combine information effectively in new and innovative ways. So for example this approach should make it easier for the regulator to compare total financial assets with the equivalent total risk weighted assets, which may highlight firms that are moving into riskier business, but not increasing asset volumes. Once up and running, the type and depth of review that firms will need to perform may need to change as a consequence given that firms should anticipate a greater variety of questions from the regulator. (More...)