Mario Draghi: Eighth ECB Statistics Conference
Welcome address by Mr Mario Draghi, President of the European Central Bank, at the Eighth
ECB Statistics Conference "Central bank statistics: moving beyond the aggregates",
Frankfurt am Main, 6 July 2016.
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Ladies and gentlemen,
On behalf of the Executive Board of the European Central Bank (ECB), allow me to warmly
welcome you to the Eighth ECB Statistics Conference. These biennial conferences are by
now a well-established tradition and always give new and valuable impetus to our work in the
field of statistics.
The title of today's conference is "Central bank statistics: moving beyond the aggregates".
Disaggregated data are indeed necessary to identify and analyse the heterogeneity that
characterises the real world. For central banks this is particularly important: to implement
policy in the most effective way, we need to know how our policy actions affect all sectors of
the economy. Both the challenges posed by the current economic climate for monetary and
macroprudential policy, and the information required to carry out microprudential supervision
by the Single Supervisory Mechanism (SSM) increase our need for granular data.
But this need for a greater level of disaggregation of data comes with its own challenges. The
first one is to ensure that data are collected in a way that permits multiple uses. This requires
greater harmonisation, and an ability to share data between institutions in a way that still
respects confidentiality. The second challenge is to engage with the financial sector to
ensure that the increase in data collection does not become burdensome.
Why the need for granular data?
Improving the collection of disaggregated data will support the ECB's main policy functions in
several ways.
On the monetary policy side, greater understanding of the functioning of money markets and
of the impact of the monetary transmission mechanism on individual sub-sectors of the
economy helps to underpin our analysis of unconventional monetary policy tools and to
effectively target future measures. Indeed, this week saw the official go-live of the reporting
of data on up to 35,000 daily transactions in the money market, complete with information on
quantities, prices and counterparties. This is a very rich information set, crucial for our
liquidity management and for understanding the first step of the monetary transmission
mechanism.
Collecting more granular data also helps us to better understand the transmission process
through the economy more broadly. We need more information on the linkages between
individual sectors of the economy and, even more so, between large financial institutions.
There are some important areas of the financial sector where we lack complete statistical
coverage, especially relating to what we call the "shadow banking system". These areas
include some complex market products and instruments.
Similarly, our new responsibilities in European banking supervision call for new data
concepts and definitions, greatly extending the need for granular data. A successful start has
been made, with a new set of legal acts. The collection of loan-by-loan data is already being
implemented, but further improvements are possible. In particular, we need to make sure that
the data we collect are of a high quality and comparable.
Effective data integration and cooperation
But today's conference is about more than just collecting additional data. The sharing of data
by authorities is also critical. Doing this effectively and efficiently, while maintaining data
confidentiality, is a priority for policymakers. It requires action from policy institutions and
lawmakers. Putting in place the right architecture will permit a faster and more efficient
response to requests across all our policy areas, greatly enhancing the usefulness of
granular data.
We have made some progress on the legal foundations for sharing granular data. Council
Regulation 2533/98 has been amended to permit the ECB to (re)use confidential statistical
information to perform its supervisory tasks. The information can also be shared with Union
institutions, including supervisory and resolution authorities, the European Systemic Risk
Board and the European Stability Mechanism for the purposes of prudential supervision and
ensuring financial stability. This is a major achievement.
The European System of Central Banks (ESCB) has also taken important steps to improve
the harmonisation and standardisation of data. The current work on the Banks' Integrated
Reporting Dictionary, a joint project involving seven national central banks and
26 commercial banks under the leadership of the ECB, is the best example. This process
could and should ultimately enable us to organise the various reporting requirements into a
single, comprehensive and harmonised European Reporting Framework.
But the need for harmonisation and standardisation also extends beyond Europe. Finance is
a global business, and both the regulation and the underlying data requirements for global
institutions would benefit from more harmonisation worldwide. Concrete steps towards
standardisation include the establishment of mandatory requirements regarding the use of
the International Securities Identification Number and the global Legal Entity Identifier.
Europe should retain its prominent role in the implementation of the second phase of the
G20 Data Gaps Initiative.
Engagement with industry
As the banking industry has pointed out, lack of standardisation pushes up costs for the
private sector and heightens the risk of mistakes or misinterpretation. And there is some truth
to this view.
Policymakers and the industry clearly have a shared interest in focusing on and discussing
data collection. It would allow banks to contain their reporting burden and remain competitive
at the global level. And it would allow policymakers to improve the quality and relevance of
the data they receive. The two groups have quite different roles, but they also share common
goals.
As such, data collection should be a joint exercise carried out by the authorities and the
banking industry. They can support each other and jointly benefit from the results. After all,
there is likely to be a large overlap between the data the authorities need and the data
managers of a financial institution require for their own purposes.
Standardising the identifiers of counterparties, transactions, products and reporting
requirements in general falls within our mandate and is probably our best course of action. I
know that this is easier said than done. The establishment of European banking supervision
under the auspices of the ECB, and of the three European Supervisory Authorities,1 gives us
a unique opportunity to make progress in this area in Europe.
Conclusion
Let me finish by saying that the well-established ESCB statistics will continue to provide the
"big picture" of economic developments. But we should also offer a magnifying glass.
Looking at the details beyond the aggregates enriches our understanding of economic
phenomena and at the same time increases our flexibility to respond to unexpected policy
needs, contributing to even better statistics.
So, once again, I welcome you to this conference and also take this opportunity to thank all
the organisers for their efforts in making it happen. I wish all of you an interesting and
successful day. I hope you find some answers to the challenges I have mentioned, and I look
forward to hearing the results of your discussions.