FRANKFURT (Reuters) - The European Central Bank will require euro zone pension funds to disclose more detailed data on their operations, arguing that it lacks proper visibility in a huge sector that is vital for the transmission of monetary policy, it said on Wednesday.
With 50 million customers and 2.5 trillion euros (2.2 trillion pounds) in assets, pension funds are among the biggest and fastest-growing investors.
That makes them vital for the ECB in gauging the success of its policy, particularly in a period of ultra-low rates when some savers doubt their funds’ ability to generate enough for their retirement.
“Current gaps in the data available and the lack of comparability across countries make it difficult to gain a comprehensive understanding of the role of the sector in the transmission mechanism of monetary policy, of the cash flows and of the risks associated with pension obligations,” the ECB said.
The ECB will ask large, autonomous funds in the euro zone to start reporting according to harmonised rules with more data also released to the public, it said in new draft guidelines that are still subject to a consultation with the industry.
The funds, excluding for example those set up by corporations or credit institutions, will have to list transactions security by security, and provide data on both assets and liabilities, broken down by economic sector, maturity and geography.
“It will help us better understand their role in the transmission mechanism of monetary policy because we will... see not just how the stocks are changing but what are they buying or what are they selling, so how do they react to our monetary policy,” said Aurel Schubert, head of the ECB’s statistics unit.
Given the added cost of the new reporting rules, national central banks may exempt some funds from the new rules, particularly if they hold less than 10 million euros or have fewer than 100 members, but each country must report on at least 80 to 85 percent of the sector.
The full extent of the new reporting requirement should involve between 1,500 and 2,000 funds, the ECB said.
The new set of quarterly data will be first collected from the first quarter of 2019, while first full-year data will have to be provided on 2018 figures.
Reporting by Balazs Koranyi; Editing by Mark Trevelyan