What is an observable event for a loan, receivable or investment?
Observable events should be disclosed on the day the observable event occurs or as promptly thereafter as is possible.
Currently, is it technically possible to provide this data to all market participants?
Yes! The databases used by credit institutions are based on tracking observable events.
In case you have any doubts that these databases work this way, consider an observable event-based report that can be accessed today by any person who holds a credit card.
- The individual credit cardholder can, using existing technology, access a web site of the credit card issuer on any day of the month and review all charges and payments that have been made on the credit card on each day during the month.
- Similarly, the credit card issuer can, using existing technology, on any day of the month review all the charges and payments that have been made on each day during the month on i) all of its credit cards, ii) a subset of credit cards which are collateral for a securitization or iii) an individual credit card.
Credit institutions have considerable expertise in observable event-based reporting. This same expertise and the same information systems could be used to support observable event-based reporting for each asset.
What are the objections by credit institutions to observable event based asset level reporting?