Office of Financial Research Official Selected to Chair Global LEI Committee
Published: January 29, 2013
WASHINGTON – An official of the Treasury Department’s Office of Financial Research (OFR) has been selected to be Chair of an international committee overseeing the launch of the Legal Entity Identifier (LEI), a global standard for financial data.
Matthew Reed, OFR Chief Counsel since March 2012, was named Chair of the Regulatory Oversight Committee (ROC) for the global LEI system. The LEI is a code that uniquely identifies parties to financial transactions and links to their basic “business card” information. By standardizing the identification of these entities, the LEI should provide financial companies and global financial regulators a better view of true exposures and counterparty risks across the world’s financial system.
“The OFR focuses on the LEI initiative because it is a key part of the OFR’s mission to help improve data quality through data standardization,” said OFR Director Richard Berner. “This public-private initiative is widely embraced by financial regulators and the financial industry globally. It will enhance global financial stability. The selection of the ROC Chair and Vice Chairs signals that the LEI is moving forward quickly with engagement across countries and market sectors, and will serve as a template for future standardization efforts.”
The ROC was established under a charter endorsed by the international Financial Stability Board (FSB) and the Group of 20 leading global economies, known as the G-20. During the inaugural meeting of the ROC last week in Toronto, which included global authorities from more than 50 countries and jurisdictions, members from the Japan Financial Service Agency and Banque de France were selected as Vice Chairs.
The recent financial crisis highlighted the need for the LEI. During the crisis, neither financial institutions nor regulators were able to assess accurately exposures to troubled companies. This shortcoming hampered and delayed efforts to respond to the crisis.
The LEI is expected to generate considerable cost savings for the financial industry in collecting, cleaning, and aggregating data. Additionally, adoption of the LEI system should reduce the regulatory reporting burden, allowing industry to use the same data for its internal business operations and risk management processes as it uses for reporting to regulators.
Treasury and other regulators across the globe have collaborated to develop a framework for governing the global LEI system. The ROC is the centerpiece for implementing that governing system.
The LEI system is scheduled to launch with oversight by the ROC by March 2013.