EBA press release: The European Banking Authority (EBA) published today a Recommendation on the use of unique identification codes for supervisory purposes for every credit and financial institution in the European Union. This Recommendation is a major step forward in harmonizing the identification of legal entities, in line with proposals by the Financial Stability Board (FSB) endorsed by the G20, to ensure consistent and comparable data.

In 2013, the EBA finalised Implementing Technical Standards (ITS) on supervisory reporting, which will ensure uniform reporting requirements across all EU Member States in a number of areas such as own funds, financial information, large exposures, liquidity ratios, leverage ratios and asset encumbrance. As of July 2014, all competent authorities shall, therefore, submit the data included in these ITS from a sample of institutions in their respective jurisdictions.

In this process, the EBA recommends that all competent authorities use a single supranational identifier for each credit and financial institution.

This Recommendation supports the adoption of a Global Legal Entity Identification system (GLEIS) proposed by the Financial Stability Board (FSB) and endorsed by the G20, which aims at delivering unique identification of parties to financial transactions across the world.

Considering that the GLEIS is not yet fully operational, the EBA considers that the use of a pre Legal Entity Identifier (pre-LEI) by competent authorities is the best short-term solution, which will enhance supervisory convergence and will contribute to ensuring high quality, reliability and comparability of data. Competent authorities and banks will also benefit from this identification if it were to be extended to banking activities other than supervisory reporting as it would allow authorities to better monitor all kinds of transactions in their jurisdictions and simplify reporting requirements for banks.

Competent authorities must notify the EBA as to whether they comply or intend to comply by 29.03.2014.

This Recommendation supports the adoption of a global Legal Entity Identification system (GLEIS) proposed by the Financial Stability Board (FSB) and endorsed by the G20, which aims at delivering unique identification of parties to financial transactions across the world.