Panelists Question Practicalities of Government-Run Ref Data Utility

Market participants are questioning if an industry-wide reference database, which has been proposed in the US Financial Reform Bill, represents a practical way forward to reduce the data challenge firms are facing, according to panelists at the SunGard New York City Day in New York.

The Bill includes a proposal to set up the Office of Financial Research (OFR), a data collection and analytics agency, which is expected to function as a reference data utility and result in additional reporting requirements for firms.

So far, there is little information on how the OFR could work in practice, but data professionals have started debating potential outcomes.

"You are not going to create an environment where you ask every company involved to send five terabytes of data a week, for example, into a centralized location," said New York-based John Avery, partner, SunGard consulting services, adding that it is also questionable whether any regulatory group would be able to handle that data in different formats and come up with answers that are meaningful in time frames that are useful.

In fact, Tabb Group's New York-based senior analyst Kevin McPartland questioned what the regulators will do with the data they would be receiving. "Do they have the capacity and the budget to manage what is probably terrabytes of data, to analyze that data and look for systemic risk?" he asked.