ALMM reporting (EBA)
The European Banking Authority (EBA) issued a set of reports, including FINREP and COREP, which fall under the category of supervisory reports. These supervisory reports handle the recognition and reporting forms for financial companies, banks, securities, investment companies and other financial intermediaries referred to in Article 107 of Legislative Decree 385/93.
The supervisory statistical reporting takes a closer look at the consolidated data of balance sheets and income statements, registered from information on individual companies belonging to the banking group. The reports require additional data relating to credit quality, securitization, life remaining derivative contracts, infra-group reports. Additional information relating to prudential supervision of heritage, solvency ratio, large risks, market risks, and the position international investment is also needed.
Regulatory reporting is one of the means through which the financial institution controlling entities analyze the financial situation of the institution.
For the banking business, the international regulatory standards are defined by the Basel Committee on Banking Supervision. This standardization body edicts guidelines on reports that banks have to provide their supervisory body. The latest set of guidelines is called Basel II and is currently enforced by the supervisory bodies. The general guidelines are adapted to each country via Country Specific Adjustments. For the insurance business, the solvency accord has instituted similar guidelines.
Generally, these guidelines are oriented around:
- ensuring sound financial practices
- ensuring the level of capital of the financial institutions covers the level of risk taken
- including correlation between various kinds of risk
They tend to ensure that in case the risks faced by the institution realized themselves the institution has the required available funds to cover the losses.