New statistical reporting requirements from European Central Bank (ECB): June 2010 deadline

The ECB is the central bank for Europe’s single currency, the euro. The ECB’s main task is to maintain the euro’s purchasing power and thus price stability in the euro area. The euro area comprises the European Union countries that have introduced the euro since 1999.

The financial crisis and credit crunch has driven many regulators to increase the amount of regulation and details contained in reports.

European firms are currently faced with an update to the statistical reporting requirements as a result of the European Central Bank’s (ECB) recast of regulations (Regulation (EC) No 25/2009 (recast ECB/2008/32) of 19 December 2008. It concerns the balance sheet of the monetary financial institutions sector with a deadline of June 2010 in many countries. This is to provide a comprehensive statistical picture of monetary development in participating member states.

The ECB must receive comparable, reliable, and up to date statistical information, collected in similar conditions throughout the whole euro area. The obligations defined in the regulations must respect the principles of transparency and legal security. These regulations also allow the ECB to impose sanctions on physical and moral persons if they do not fulfil the reporting requirements imposed on them by the ECB.

Special Purpose Vehicles (SPV) are now required to report the statistical balance sheet on an individual basis. SPVs are being seen as one of the main contributors to the current crisis, because of the nature of their business and the lack of specific supervision on them. The lack of specific supervision is mainly due to the fact they only appear as consolidated items into the balance sheet of their holders, providing no real insight to the risk taken within the SPV activities. The ECB therefore intends to address this area specifically with the announced changes.

The broad clauses of this regulation include:

• Maintenance of a list of MFIs for statistical purposes
• Minimum standards and national reporting arrangements
• Statistical reporting requirements, including those for loan securitisations and other loan transfers
• Accounting rules for the purposes of statistical reporting
• Use of reported statistical information for purpose of minimum reserves
• Timelines: monthly quarterly and annual dates by which reporting must be complete
• Derogations depending on the FI and scale of operations
• Stipulations for mergers, divisions, and reorganisations
• Verification and compulsory collection of information