Legal Entity Identifiers: A Global Opportunity

Adopting Legal Entity Identifiers across the value chain

One thing that became clear during the financial crisis was that many financial services organisations did not have an effective process for understanding their counterparty exposures or the exposures of their counterparties' counterparties; thus impairing their ability to effectively manage risks and challenging the confidence of investors and counterparties.

The problem was largely due to the inability of organisations to capture and aggregate their legal entity level exposures accurately, which in turn hindered their ability to assess their counterparty risk. Across the industry, organisations were unable to quickly and accurately report their exposure making it impossible for supervisors to determine either: the systemic risk posed by relationships between organisations; or the risk posed by particular counterparties.