OFR_2016_Financial-Stability-Report

Quality. A major initiative since the crisis is the legal entity identifier (LEI).
The LEI is now required by derivatives markets regulators around the world.
However, in other markets, adoption has been less consistent. The LEI experience
shows that relying on market participants to voluntarily adopt a standard
may not be enough. Broader regulatory mandates are required (see
Broader Adoption of Data Standards Needed).
Much has been done to ensure standardized reporting in new data collections.
Some of the new regulatory forms demand consistency from filers,
such as the Form Y-14 filed by large bank holding companies and the proposed
Form N-PORT to be filed by mutual funds and exchange-traded
funds (ETFs). In other cases, inconsistent and inadequate data still obstruct
analysis. More public- and private-sector collaboration is needed to set and
use data standards.
Access. Some of the new post-crisis data are publicly available, such as the
Form N-MFP filed by money market funds. But confidentiality concerns
preclude public distribution in most cases, and regulators continue to face
difficulties in securely sharing confidential data with each other (see Better
Regulatory Sharing Needed). Regulators need timely access to data leading
up to and during stress events and for analysis afterward. Confidential data
can support financial stability monitoring and analysis. For example, the
OFR has used Form PF data to study leverage and concentration risk in
hedge funds.
Securities Financing
Borrowing and lending securities support price discovery, secondary market
liquidity, and risk management (see Lipson, Sabel, and Keane, 2012). The
OFR, Federal Reserve, and SEC have worked since 2014 on pilot projects
to collect data on U.S. bilateral repurchase agreements (repos) and securities
lending activities (see Baklanova and others, 2016a; Baklanova and others,
2016b). The three agencies are preparing for a permanent collection.
Regulators are also working across borders through the Financial Stability
Board to coordinate national data collections and create global aggregated
data. We have shared OFR data templates and the lessons learned from
our pilots to support these efforts. European regulators issued regulations
in December 2015 to promote transparency in shadow banking. They also
proposed a reporting framework for securities financing transactions. Such
a framework would include data fields, definitions, and formats.
Challenges remain. National regulators tend to gather data only in their
jurisdictions, and reporting rules vary. Multinational firms report different
pieces of their global activities to different regulators, and these differences
increase the difficulty of comparing data across borders. Some regulators
Confidential data can
support financial stability
monitoring and analysis.
For example, the OFR
has used Form PF data
to study leverage and
concentration risk in
hedge funds.
Key Threats to Financial Stability 79