11 November 2015 (updated on 10 July 2019)
AnaCredit is a dataset with detailed information on individual bank loans in the euro area. The name stands for “analytical credit datasets”. The ECB launched the project in 2011 – together with the euro area and some non-euro area national central banks. It uses data and national credit registers to achieve a harmonised database that supports several central banking functions, such as decision-making in monetary policy and macroprudential supervision.
Good policy decisions are based on good data. The need for better and more detailed statistics has increased with the financial crisis, for two reasons.
AnaCredit is based on harmonised concepts and definitions and on a complete coverage for (at least) all euro area member states, ensuring more comparability. Therefore it improves the statistical information basis for the Eurosystem in a significant way.
The key to making good decisions is having a clear view of the situation. This is why central banks need good statistics. Fully analysed statistics provided by AnaCredit will contribute to clearer and more detailed information used to assist monetary policy decision-making and help keep the financial system sound and transparent. This will bring important benefits for everyone: policy makers and supervisors, but also banks and, eventually, citizens.
AnaCredit provides data with a deep level of detail for all euro area member states, and these data are fully comparable because they are based on harmonised concepts and definitions. Therefore AnaCredit enables analyses and comparisons that could not be provided based on previous aggregated data. These analyses are important parts of key central banking policy functions, such as monetary policy preparation and implementation, and macroprudential oversight.
For instance, AnaCredit provides detailed data on the availability of credit to enterprises, including small and medium-sized enterprises (SMEs), for which we previously only had partial information based on some surveys. Differences in the supply as well as demand conditions for different economic sectors or categories of firms (e.g. small vs large, manufacture vs services) are now apparent – something previously hidden behind the aggregates. Reliable information on SMEs’ access to bank loans is very important for monetary policy decisions as SMEs are the backbone of the European economy and the main employers, and their financing conditions depend almost uniquely on banks. The granular data collected by AnaCredit is also used to assess the development of corporate debt and its sustainability for this specific category of firms, which is very important when assessing the risk associated with certain classes of banks’ exposures.
Also in assessing emerging risks to financial stability, experts need detailed information. For example, if the banking system in a member country is not well diversified and is overly exposed to specific regions or industries, AnaCredit can highlight this and enable a more accurate analysis of (sectorial or regional) credit risks and their potential build-up into systemic risks in the financial sector.
Harmonised reporting through AnaCredit also enables evaluation of the total loan exposure of a company towards all euro area banks, including cross-border exposures. This was previously missing, due to incomplete or not fully comparable information. Bank supervisors are now able to detect when a particular company is showing signs of delayed repayments to one or more banks, assess the creditworthiness of that company and evaluate the potential risk for the banks exposed to it.
AnaCredit only asks for and collects the data that are strictly necessary. At present only data on loans to corporations (and other legal entities) are requested, and only as long as these loans are larger than €25,000. The use of a relatively low threshold is especially relevant to close large data gaps related to the analysis of the financing of small and medium-sized enterprises across the euro area.
In general, the ECB does not need and does not want to know the identity of private household borrowers. If, at some point in the future, the ECB Governing Council considers extending AnaCredit to loans to private households – for example real estate loans – those data will be anonymised. As a safeguard, and to ensure the appropriateness of the legal text in this respect, the ECB also consulted the European Data Protection Supervisor, whose guidance has been fully taken into consideration.
Central banks have extensive experience in preserving data confidentiality. This is part of their daily business. The Eurosystem already manages a lot of very sensitive information and has appropriate systems in place. Credit registers are currently in operation in several European countries, and in some cases they include a much larger amount of sensitive information than foreseen here. Every precautionary measure is being taken and will be taken to protect personal data in accordance with the EU personal data protection framework. This is harmonised in Directive 95/46/EC and similarly laid down in Regulation (EC) No 45/2001 of the European Parliament and of the Council.
Given the requested level of detail, the ECB is aware of the burden imposed on reporting agents, especially in those countries where the reporting of granular information is a new concept. To this end, in 2014 the ECB completed a comprehensive “merits and costs” exercise, with a view to minimising the reporting burden. Thanks to this procedure, the AnaCredit regulation includes only those requirements for which the confirmed policy relevance or operational usefulness was high enough to justify the set-up and regular costs of the data required. This “merits and costs” procedure has been a long-established standard for all new ECB statistical requirements. All in all, it is definitely worth the effort to collect these data, as both central banks and banks themselves need detailed and timely information about credit exposures, each for their own purposes.
In addition, all efforts have been made to limit this burden as much as possible, especially for smaller institutions. To ensure proportionality, smaller institutions can be granted derogations by the respective national central bank. In some countries this can result in several hundred banks being completely exempted from the reporting obligations.
This must be put in perspective. Let’s take a look at what kind of data is required for individual loans. We are talking about 94 data “attributes” and 7 unique identifiers that are used several times across the various templates requested. While it’s true that some sensitive information on firms (e.g. name, address, legal form) is requested, this is needed to enable the consolidation of the full amount of a corporation's debt, which might be spread all over Europe across a large number of banks. The information, therefore, has to be granular, exact and detailed.
From the beginning of the project, the ECB carefully assessed the impact of AnaCredit with a view to containing the costs incurred. As required for any new collection of statistical information, the ECB – in the course of 2014 – applied a “merits and costs” procedure, where the expected merits of the new information for users were assessed against the associated costs, including those estimated for reporting agents, i.e. banks. Representatives of the banking industry were directly involved in this process, mainly via the respective national central banks (NCBs). This well-established procedure ensures the most cost-effective definition of the reporting requirements. On 4 December 2015 the ECB launched an informal public consultation on the draft ECB Regulation on the collection of granular credit and credit risk data (AnaCredit), providing the general public with the opportunity to make observations concerning the reporting requirements. Following the consultation, the ECB analysed and gave due consideration to all comments received. Should the ECB Governing Council consider an extension of the scope of the AnaCredit dataset in the future, it will also reflect on the appropriate process for involving the various stakeholders, including the possibility of a public consultation on requirements regarding data specifically collected for banking supervision purposes.
This explainer was updated on 10 July 2019 to reflect the fact that AnaCredit has now been implemented in the eurozone.