Remarks of James Martin, Acting Director of the Office of Financial Research, at the RegTech 2023 Data Summit
Published: April 11, 2023
As prepared for delivery
Good afternoon. Thank you, Nick, for that kind introduction, and thank you to the Data Coalition for hosting the RegTech Summit and for inviting me to speak.
I’ve had the pleasure of speaking at various financial stability–themed events since stepping into the role of OFR Acting Director in February 2022. I was particularly excited by the invitation to speak at the RegTech Summit when I saw that “Data Modernization Under the Financial Data Transparency Act” was the summit’s theme. The theme allows me to highlight OFR’s work in advancing data standards—which is a key OFR workstream and was work I focused on after I joined the OFR in 2016.
If I were asked to summarize the FDTA, I would say the law, has two goals:
One, to require regulators to include common identifiers, including a legal entity identifier, and encourage regulators to adopt data standards that meet a half dozen criteria, including rendering data fully searchable and machine readable.
And two, for regulators to make their information accessible as open government data assets, meaning the data is available in an open format, its use or reuse is not encumbered by restrictions other than intellectual property rights, and the data’s format is based on an underlying open standard that is maintained by a standards organization.
These data should also be freely available for download, rendered in a human-readable format, and, when appropriate, accessible via an application-programming interface.
When financial regulators standardize their data and make it available in an open format, these data can be shared, integrated, and analyzed, without losing the meaning of the original data. The FDTA encourages this foundational concept of interoperability among regulatory data.
I’m proud to say that the OFR has not only been vocal in its support for these goals but has also been leading by example since the office’s inception in 2010.
Data standards are essential to improving data quality, accessibility, and the effective sharing of financial data. They enable financial activity to be measured in a consistent way across markets and sources. Comparing, aggregating, and analyzing disparate datasets for financial-stability analysis is nearly impossible without granular data standards.
Those of us who have worked in the trenches of data standards and harmonization also know the reality is that this work can be, by nature, slow, tedious, and highly technical. However, the incremental progress that financial authorities have made over the past few years has already produced significant results.
Many in this room likely equate OFR’s work on data standards with the Legal Entity Identifier, or LEI. Like a bar code for precisely identifying parties to financial transactions, the LEI helps make the flood of data flowing in the financial system easier to compare and share. The LEI can also generate efficiencies for financial companies in internal reporting and in collecting, cleaning, and aggregating data. The LEI is a foundational data standard that the OFR played a lead role in developing and promoting. We remain committed to advancing the LEI and are thrilled that more than 2 million LEIs have been issued.
However, the OFR’s work advancing data standards extends beyond the LEI. The OFR is a leader in promoting the development, adoption, and use of financial data standards through its leadership roles in multiple standards-setting bodies. Last year alone, the OFR helped advance the development of ISO’s Natural Person Identifier, standards for financial instruments, and standards for retail card and mobile-based payments.
I’m exceptionally proud of OFR’s data standards team and could provide countless more examples of their good work. But I want to move on to the second goal of the FDTA that I mentioned earlier: making financial regulatory data more accessible.
Both financial regulators and market participants need access to high-quality financial data. Financial regulators need data to assess and monitor risks across the financial system. Firms need data to manage risk and to reduce costs. The need to access data in a timely way remains paramount, and regulators can continue to do their part, when possible, by making certain financial data openly available.
The OFR makes several data products available to the public, including data on money markets, financial stress, and bank contagion. The data displayed in those products are aligned with industry standards and available for download, for free, without registration. Aggregate timeseries based on our cleared repurchase agreement collection are also available through an API.
Those paying close attention will notice that I said all of our published data are available for download, for free, but that only some are available through an API. In the spirit of openness, I do acknowledge that even the OFR has places to improve—and expanding API access is a priority.
As the financial system changes, evolves, and innovates, new threats and vulnerabilities are ever emerging. High-quality data that are both accessible and interoperable, conforming to common standards, are crucial to understanding and tracking risks to financial stability, as well as crucial to developing sound policies to mitigate these risks.
The job is massive and challenging, and we need the help of people like you in this room and online. I welcome your commitment to and partnership in advancing data standards and making data more accessible as we move forward.
Thank you again for having me here today.