Allan Grody says that LEI will allow for more sophisticated risk surveillance.
What do railroad tracks, bar codes and the World Wide Web
have in common with a LEI? They are all standards –
physical world standards in the case of both the width of rail
road tracks and the unique product identifiers in bar codes.
They make transportation and global commerce work. The World
Wide Web and the LEI (Legal Entity Identifier) are information
age standards – the former allows global access to
billions of web pages on the Internet and the latter is being
prepared for global access to billions of financial
The LEI is at the beginning of a long chain of regulatory
initiatives to monitor financial institutions through the
transactions they engage in and the risk exposures they
engender. The very first pillar of global financial reform is a
standard for an automated coding scheme for identifying the
same financial market participant to each regulator in the same
way. The G20’s Financial Stability Board (FSB), an
entity with a broad charter to risk adjust the financial
system, has begun laying the foundation for such a regulatory
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