Agency Information Collection Activities: Announcement of Board Approval Under Delegated Authority and Submission to OMB

AGENCY:

Board of Governors of the Federal Reserve System.

SUMMARY:

The Board of Governors of the Federal Reserve System (Board) is adopting a proposal to extend for three years, without revision, the Report of Institution-to-Aggregate Granular Data on Assets and Liabilities on an Immediate Counterparty Basis (FR 2510; OMB No. 7100-0376).

FOR FURTHER INFORMATION CONTACT:

Federal Reserve Board Clearance Officer—Nuha Elmaghrabi—Office of the Chief Data Officer, Board of Governors of the Federal Reserve System, Washington, DC 20551, (202) 452-3829.

Office of Management and Budget (OMB) Desk Officer for the Federal Reserve Board, Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Room 10235, 725 17th Street NW, Washington, DC 20503, or by fax to (202) 395-6974.

SUPPLEMENTARY INFORMATION:

On June 15, 1984, OMB delegated to the Board authority under the Paperwork Reduction Act (PRA) to approve and assign OMB control numbers to collections of information conducted or sponsored by the Board. Board-approved collections of information are incorporated into the official OMB inventory of currently approved collections of information. The OMB inventory, as well as copies of the PRA Submission, supporting statements, and approved collection of information instrument(s) are available at https://www.reginfo.gov/public/do/PRAMain. These documents are also available on the Federal Reserve Board's public website at https://www.federalreserve.gov/apps/reportforms/review.aspx or may be requested from the agency clearance officer, whose name appears above.

Final Approval Under OMB Delegated Authority of the Extension for Three Years, Without Revision, of the Following Information Collection

Report title: Report of Institution-to-Aggregate Granular Data on Assets and Liabilities on an Immediate Counterparty Basis.

Agency form number: FR 2510.

OMB control number: 7100-0376.

Frequency: Quarterly.

Respondents: Any bank holding company (BHC) that is organized under the laws of the United States or any U.S. state and that is identified as a global systemically important bank (G-SIB) holding company under the Board's Regulation Q.

Estimated number of respondents: 8.

Estimated average hours per response: 568.

Estimated annual burden hours: 18,176.

General description of report: The FR 2510 collects granular exposure data on the assets, liabilities, and off-balance sheet holdings of G-SIBs, providing breakdowns by country, instrument, currency, maturity, sector, and other factors, and also collects country exposure data on an immediate counterparty basis and detailed information on firms' derivatives exposures. The information collected by the FR 2510 supports the Board's supervision of U.S. G-SIBs by allowing for a more complete balance sheet analysis of these firms and allows the Board to more closely monitor the systemic impacts of such firms' activities and investments.

Legal authorization and confidentiality: The FR 2510 is authorized by section 5 of the Bank Holding Company Act (BHC Act). Section 5 of the BHC Act authorizes the Board to require a bank holding company and any subsidiary of such company to submit reports under oath to keep the Board informed as to its financial condition, systems for monitoring and controlling financial and operating risks, and transactions with depository institution subsidiaries of the bank holding company. The FR 2510 is mandatory for U.S. G-SIBs.

The information collected in the FR 2510 is collected as part of the Board's supervisory process and is therefore considered confidential pursuant to exemption 8 of the Freedom of Information Act (FOIA), which protects information contained in “examination, operating, or condition reports” obtained in the bank supervisory process. In addition, individual respondents may request that information be kept confidential pursuant to exemption 4 of the FOIA, which protects nonpublic commercial or financial information, which is both customarily and actually treated as private by the respondent. Determinations of confidentiality based on exemption 4 of the FOIA would be made on a case-by-case basis.

Current actions: On October 18, 2021, the Board published a notice in the Federal Register (86 FR 57672) requesting public comment for 60 days on the extension, without revision, of the Report of Institution-to-Aggregate Granular Data on Assets and Liabilities on an Immediate Counterparty Basis. The comment period for this notice expired on December 17, 2021. The Board received one comment.

Detailed Discussion of Public Comments

First, the commenter identified certain reporting differences between the Country Exposure Report (FFIEC 009; OMB No. 7100-0035) and the FR 2510 and argued that reporting of similar items between the two reports should be more aligned in order to minimize reporting burden. Specifically, the commenter highlighted the difference in remaining maturity on debt securities held for trading between the FFIEC 009 and the FR 2510. On the FFIEC 009, only a single bucket containing maturities of one year or less is required, whereas the FR 2510 requires four maturity buckets across the entire term structure. While the Board acknowledges the additional burden in reporting all maturity buckets in the FR 2510, this was part of the original design of the report and was meant to “provide significantly more detail regarding the balance sheet and derivatives exposures of U.S. G-SIBs.” This original design was part of an internationally agreed upon process to facilitate the aggregation and analysis of consistent and comparable data from G-SIBs globally. In addition, the FR 2510 collects a more fulsome set of remaining maturity information to better understand the credit market and liquidity profiles of U.S. G-SIBs, which may have systemic implications at the individual institution level or the aggregate level. The FFIEC 009, on the other hand, collects overall country risk exposures for banks of all sizes and such detail is not needed for smaller institutions.

The commenter also noted that the FR 2510 instructions allow respondents to use either the final contractual maturity or the next repricing date, where applicable, for reporting the remaining maturity of debt securities. In contrast, the FFIEC 009 instructions do not offer firms this option and require the use of final contractual maturity. The Board recognizes that on the FR 2510, firms are allowed to report next repricing date; however, firms are not required to do so. FR 2510 respondents are free to report remaining maturity of debt securities data on the same basis as the FFIEC 009. Also, the option to use final contractual maturity or next repricing date is comparable to how remaining maturity of debt securities is reported on the Consolidated Financial Statements for Holding Companies (FR Y-9C; OMB No. 7100-0128), specifically on the Securities Schedule HC-B, line items M2 and M2(a)-M2(c).

Additionally, the commenter identified an inconsistency between the FR 2510 and the FFIEC 009 with respect to the sector utilized for the reporting of central bank exposures. On the FR 2510, claims on central banks are reported in the “Unallocated” sector, which is designated for positions for which the sector of the counterparty is unknown or the sector information does not need to be reported. However, the reporting instructions to the FFIEC 009 require respondents to include central banks in the “Public” sector, which includes government departments and agencies. While the Board acknowledges that this difference can cause issues with comparability and can be burdensome for the reporting institutions, this distinction was intentional, as to avoid lumping claims on central banks together with claims banks have on governments such as sovereign bond and municipal security holdings.

Second, the commenter highlighted a concern with the inconsistency of reporting debt securities on the FR 2510 and the FR Y-9C. The FR 2510 requires debt securities to be broken out into the following three categories: Asset-backed securities (ABS), Other secured debt securities, and unsecured debt securities. This segmentation is not the same as found on the FR Y-9C, which requires respondents to break down debt securities into the following six groupings: U.S. Treasury securities, U.S. government agency and sponsored agency obligations, Securities issued by states and political subdivisions in the U.S., Mortgage-back securities (MBS), Asset-backed securities and structured financial products, and Other debt securities. The commenter pointed out that this discrepancy requires firms to look through and track features of securities that are not captured on other reports in great detail, creating significant burden. The commenter requested that the FR 2510 be modified to adopt the debt securities classification from the FR Y-9C. While the Board acknowledges the burden entailed in having two different classifications for the same debt securities, the internationally-agreed template for G-SIBs includes a different and less detailed breakdown than that which U.S. regulators have specified in various regulatory reports including the FR Y-9C, which is aggregated around several classes of securities that are idiosyncratic to and proportionately more important in U.S. debt markets.

Finally, the commenter raised several process issues regarding rounding differences between the data reported on the FR 2510 and the FFIEC 009, synchronizing proposed future changes to these reports, and providing adequate lead time for any proposed revisions to the FR 2510. With respect to the rounding differences, the Federal Reserve regularly reviews and updates operational controls associated with Reporting Central outside of the clearance process and will review this recommendation accordingly. To the degree that there are future proposed changes to the FR 2510 or the FFIEC 009, which apply to both reports, the Board will strive to make these changes on similar timelines and provide adequate lead time for such changes. The Board does not plan at this time to propose changes to the FR 2510 that are consistent with the current FFIEC 009 proposal. Those proposed changes to the FFIEC 009 are not applicable to the FR 2510.

The Board believes that the differences in reporting between the FR 2510, the FFIEC 009, and the FR Y-9C are warranted for the reasons described above. Therefore, the Board will not adopt any revisions to the FR 2510 as part of the extension of this collection.