Financial Reporting (FINREP)

Likith Kumar Jayaraman -

FINREP, or Financial Reporting, is a regulatory framework established by the European Banking Authority (EBA) (and since adopted by the Prudential Regulatory Authority (PRA)) to harmonize financial reporting for banks and financial institutions across the EU and the UK. As part of the Capital Requirements Directive IV (CRD IV) package, FINREP was introduced to enhance the transparency, consistency, and comparability of financial information. It was introduced on 30th September 2014. FINREP consists of 40+ templates and approximately 3,500 data points, which banks are required to submit on a quarterly basis. This framework requires financial institutions that are listed on a stock exchange to or Generally Accepted Accounting principles (GAAP) compliant financial statements, depending on jurisdiction, to report detailed data on their assets, liabilities, income, expenses, and risk exposures.

The templates include:

  • Balance Sheet
  • Income Statement
  • Comprehensive Income
  • Equity
  • Disclosure of Financial Assets and Liabilities
  • Off-balance Sheet Activities
  • Non-financial Instrument Disclosures

The primary objective of FINREP is to provide regulators with a comprehensive understanding of the financial health and performance of institutions, facilitating better supervision and oversight. The FINREP return is also designed to monitor the financial stability of an institution and identify any potential or emerging risks. The consistent and detailed financial data provided under FINREP helps regulatory bodies to make informed decisions and take timely actions to mitigate risks, ensuring the resilience of the financial sector.