Definition of Anacredit
Anacredit (acronym of ‘analytical credit dataset’) is a credit-related analytical database containing exact and detailed information on financing and guarantees granted by the banking sector to legal entities in the Euro area.
The financial crisis which started in 2007 had a decisive impact on the global economic activity, leading the National Central Banks to introduce new and significant regulations aimed at preserving the system. In particular, the reinforcement of the information assets directed to supervisory control, monetary policy functions, financial stability and risk management is crucial.
For some time now the Bank of Italy has been taking steps to collect information from the banking system. In particular, the Credit Risk Register has been managing the data relating to credit risk since the ‘60s. In the beginning, an aggregated-type collection method was used; the granular collection has been introduced later, with the emergence of other needs in the supervisory environment.
At international level, the initiative started from the European Central Bank in 2011 and integrated into a wider regulatory context, which provided for the introduction of several innovative solutions to increase the financial system’s stability and security, such as FINREP and COREP supervisory reporting frameworks (Financial and Common Reporting) relating to financial and prudential data.
At European level, the collection of harmonised data and credit risk have been carried out on an aggregated basis up until the introduction of new Regulation (EU) 2016/867 (AnaCredit Regulation).
This regulation has launched the granular methodology and disciplined the harmonised recognition of credit disclosure in the Eurozone. In fact, AnaCredit is part of an international model called ‘European Reporting Framework’ (ERF) which allows the European Authorities to reach an overview of the banking framework in the EU.
The European Central Bank approved Regulation (EU) 2016/867 (ECB – 2016/13, so called ‘AnaCredit Regulation’) on the collection of granular credit and credit risk data in May 2016. Since 2018, following this regulation, information on credit regarding corporate financing and guarantees granted by the financial system have been retrieved from banks residing in the territory, as well as from their foreign branches. It should be highlighted that the amount of credit concerned for data collection needs to exceed 25,000 EUR. This threshold, fixed at a minimum level, enables SMEs to be involved in data analysis, from which they were previously excluded.
Such reporting converges into a European archive run by the ECB. National Central Banks can use existing data at European level to implement the information they already possess, feedbacks (Bank of Italy feedback) and primary reporting, complying with specific guidelines all the while.
A fundamentally significant aspect for AnaCredit is data quality (data governance), functional to release correct and appropriate information during system interrogation. Data quality is a key point which unites the whole supervisory process and all control reporting, both at national and international level.
Use of AnaCredit data
AnaCredit assimilates into the view of an information standard process within the European context. The aim is to have a source of internationally comparable and harmonised data in place which allows an analysis of the entire financial landscape through the comparison of similar data, thus improving statistical outcomes in the EU.
The ECB uses harmonised granular data on credit for different purposes, especially relating to:
- Monetary policy
- Research and statistics
- Macroprudential supervision
The advantages of AnaCredit for the Authority
- AnaCredit collects detailed and harmonised data on credit granted to all companies in the Euro area, allowing analysis and researches which weren’t possible before to support monetary policy and macroprudential supervision decisions;
- Granular data processed through AnaCredit are useful to study corporate debit trends and their sustainability;
- AnaCredit enables to assess credit risk both at regional and industry level, allowing a quicker decision-making process for the Authority and the management of potential systemic risk;
- The possibility to use credit data both from resident banks and foreign branches leads to a clearer and detailed outline of the credit risk exposure of the entities involved;
- The 25,000 EUR minimum threshold to be included into AnaCredit reporting supports SMEs’ observation of and behaviour towards the system. This is evidently beneficial and has never been possible before.
AnaCredit advantages and costs for banks
The creation of more complete and comprehensive databases enables banks to respond in a timely and more detailed manner to the ongoing requests from Central Banks, using data contained in the system to sustain the business’ strategical and operating decisions.
Moreover, the transition from earlier aggregated data to granular data can contribute to achieve sounder reporting requirements in the long term, as well as to reduce disclosure costs. Granular data increase information management flexibility, allowing the user to generate new aggregations starting from elementary data and to respond depending on company policy demands.
The importance of the IT infrastructure
Support from appropriate applications and technological infrastructures is crucial throughout the constant evolution of reference regulations. The authorities’ requests the banking system has to satisfy become increasingly complex and frequent. The need to be compliant has become a duty not to be neglected, and it should be fulfilled to avoid heavy economic penalties or considerable reputational consequences.
The TIGREARM suite features a dedicated module for AnaCredit reporting: Anacredit Conversion
This TigreArm module allows the management of Anacredit reporting. In particular, it enables the user to read bases and surveys (so-called ‘remarks’) in an xml format and to transform them into xlsx templates. Users are also able to cross bases with remarks to outline the fields presenting anomalies, as well as to correct base data directly on the Excel template: the xml flows is thus regenerated and ready for the sending to the Bank of Italy through A2A.
Discover the dedicated AnaCredit module: ANACREDIT CONVERSION
Like every other TigreArm module, this module is web-based and can be used also for remote working