27 September 2023 - Summary of minutes

Place: Bank of Finland / Microsoft Teams

Present: Officials of the Bank of Finland (BoF) and Financial Supervisory Authority (FIN-FSA). Industry representatives from Nordea, the Savings Banks Group, OP Financial Group, ALM Partners, Aktia and Finance Finland

1. Minutes of the previous meeting and summary of the minutes

• The minutes of the previous meeting and summary of the minutes are adopted following an addition requested by an industry representative. A summary of the minutes is approved for publication on the Bank of Finland's iReF site
• It is agreed at the summary minutes are published in three languages: Finnish, Swedish and English

2. Takeaways from ECB meetings

2.1 Working Group on Integrated Reporting and Data Dictionary (WG IRDD) on 6-7 September 2023 and Statistics Committee (STC) on 21-22 September 2023

• The BoF presents iReF-related topics discussed in ECB meetings, the most important ones being the following:
  
  • Framework agreement-like contracts covering several loans will probably not be collected in a separate table.
  • There are plans to propose the collection of more granular data on unquoted debt securities, including issuances, interest payments and market prices
  • A new draft of the reporting schema will be published after a complementary cost-benefit analysis (cCBA) The intention is to model the schema using the EBA's Data Point Model (DPM) 2.0 (so-called DPM Refit)
  • There is broad consensus about sharing the validation rules and plausibility checks with reporting agents
  • There has been strong support for conceptual harmonisation with the FINREP solo level in the context of the cCBA
  • As regads securities transaction data, it has not been decided yet whether submission will be required or if they will be computed by the IReF system
  • The option of voluntary full reporting is likely to continue, and national central banks will continue to have the authority to grant concessions
  • As regards submissions for national data requirements, separation of this data into national tables is currently in progress. In practice, this means, for example, that housing corporations and other non-financial corporations are reported separately as S.111 and S.112 in the national tables but aggregated at level S.11 in the common euro area tables
• The BoF notes that the analysis of the results of the cCBA genuinely is all about striking a balance between costs and benefits. For example, if the ECB's user committees find the collection of an information item necessary but the industry deems its submission expensive, the benefits must be well justified

3. Responses to the cCBA

• Overall, the Finnish sample in the cCBA is good in terms of balance sheet size, as the respondents account for 83% of the aggregated balance sheet of the MFI sector
• The benefits of loan-by-loan data collection for households were found higher from the reporters’ perspective than the disadvantages
  
  • An industry representative raised the question how much work would be required to make revisions due to isolated violations of validation rules
    
    • The BoF stated that technical validations must always be passed, but quality control for e.g. plausibility criteria is based on relevance i.e. larger positions have higher priority
  • The BoF believes that data users will also find this data collection highly necessary
• The costs of collecting additional attributes on real estate loans have been considered high, and therefore the requirements are unlikely to take effect in as such
• The collection of off-balance sheet items is also likely to cover, for example, unutilised credit line
• Most of the requirements concerning the collection of climate change-related attributes are found expensive
• As regards reporting schedules, the schedule of the current LuoTi data collection is considered the most feasible of the alternatives discussed