Page 332 - Special Topic Session (STS) - Volume 1

STS441 Burcu Zühal İ.E. et al.
interconnectedness of OTC derivatives market participants and limited
transparency of counterparty relationships. One main recommendation as part
of the DGI was to accelerate the implementation of strong measures to
improve transparency and regulatory oversight of OTC derivatives in an
internationally consistent and non-discriminatory way. In Europe, a large part
of the G20 data gap reform initiative was formalized in 2012 in the European
Market Infrastructure Regulation (EMIR). EMIR introduces the mandatory
reporting of all derivative contracts to trade repositories since February 2014.
As a member of FSB, Turkey has established an important part of the
necessary regulatory framework concerning these reforms. Takasbank (Central
Clearing Party) has been working on a project that would allow OTC derivatives
to be centrally cleared. Regulation on operating principles of trade
repositories was published and entered into force on 19 September 2018. OTC
derivatives reporting has started in September 2018. Additionally, reporting
obligation fully compatible with EMIR is planned to enter into force and cover
all OTC derivative products in June 2019. All asset classes are planned to be
reportable beginning from the second half of 2019. Although this data set will
cover all the derivative transactions, it doesn’t serve the purpose of analyzing
NFCs’ natural hedges to cover its foreign exchange risk exposure as of today.
Although there is particular information on the liability side of the balance
sheets, the asset side of the balance sheet cannot be analyzed in detail. On the
other hand, firms which have massive FX liabilities may have specific features
which enable them to reduce their FX risk exposures. The risks may be
eliminated through hedging operations or exports constitute a natural hedge
for companies which has FX loans. The available data sets however, are needed
to be coherently integrated and some of them are by themselves not enough
to calculate the real net FX positions of the real sector due to recording
standards, time lags and currency conversions. This brings forward the need
of a data hub which provides a comprehensive data set for FX risk monitoring
of non-financial corporations.
There are ongoing attempts to obtain additional data related to the NFCs’
financial conditions. In this regard, trade registry data, credit registry data,
public financial statements, foreign trade and investment incentive data,
media and text analytics, external credit scoring, financial statements reported
to Revenue Administration, employment data, economic tendency surveys,
spot exchange transactions are planned to be compiled and integrated in a
360 degree manner and the aim is to constitute a comprehensive data set
which provides all the necessary micro level information regarding a
company’s financial position. A major part of this “360 degree systemic risk
data monitoring system” study has been completed. So far, integration of the
trade registry data, credit database of the Banks Association of Turkey,
financial tables from Revenue Administration, CBRT’s economic tendency

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