April 8, 2014, Inside Reference Data – Waters Technology

“The regulators want to understand, if something goes wrong, if there is stress in the system, how do you assess the risk? How do you assess the danger if something goes wrong at the entity level?” says Sablone. “Information about the instrument is great, but we have seen that knowing you hold a bond from issuer ABC doesn’t serve any purpose, if you don’t know that the issuer ultimately is Lehman Brothers.”

He adds: “If you look at BCBS 239 [Principles For Effective Risk Data Aggregation and Risk Reporting], for example, the regulators will ask you: what process do you have around all of your counterparty data, all of your issuer data? What data quality measures are you putting in place to ensure the data you have is accurate at the entity level?”