EDW: A decade of data leadership in securitization markets
The breadth, depth, and calibre of EDW’s data allows insight into a huge range of critical trends
Born out of the turmoil of the global financial crisis, European DataWarehouse (EDW) has spent the last decade working tirelessly to bring rigour, transparency, and consistency to the securitization market.
As the continent’s first securitization repository, EDW has collected billions of loan records across thousands of transactions and helped Europe’s banks enter a brave new world of data reporting. Celebrating its 10th anniversary as a crucial pillar of the industry, the company is GlobalCapital’s European Securitization Data Provider of the Year.
EDW’s early years were somewhat “bumpy”, says CEO Christian Thun. The market was less than thrilled at having to fund a new entity and engage with a new reporting and disclosure framework. But there was no question EDW was a vital creation. In 2012, available securitization data was often incomplete and the actual content of ABS collateral pools largely opaque.
European securitization is now one of the most transparent financial instruments on the planet, and this regime, that EDW is part of, was a major contributor to that achievement
“One way to measure the progress that EDW has helped drive is by the quality of the data,” says Thun. “When we started it had very limited value - 10 years later it's hundreds of times better, the number of errors has been drastically reduced, and you can really learn from the data.”
The breadth, depth, and calibre of EDW’s data allows insight into a huge range of critical trends - from the rise in credit card debt and mortgage holidays to the electric vehicle purchases by income bracket. “This degree of transparency, and almost real-time flow of information, was unthinkable a decade ago,” says Thun.
Initially, the company found most of its time spent guiding banks through new processes and frameworks and justifying its contribution. But improvements in data quality and clarity quickly became evident, strengthening the market and steadily returning trust to what was then a stricken asset class. “European securitization is now one of the most transparent financial instruments on the planet, and this regime, that EDW is part of, was a major contributor to that achievement,” says Thun.
An important intermediary
EDW has also been in a unique position to act as an intermediary between the regulators and market players. Funded by 16 leading market participants including banks, rating agencies, and professional organisations, the repository can offer feedback and assistance on how to improve data quality, technology, and reporting. In conversation with regulators, EDW has helped improve and bolster disclosure templates in a way that makes the overall system stronger.
“We are neutral by design because we were set up as a utility to serve the market,” says Thun. “So although we can never take sides, we can offer a very balanced view on data provision and what information and interfaces are required.”
EDW's vital role in Europe’s securitization market was further enshrined in 2021, when the company was designated as a securitisation repository by the European Securities and Markets Authority (ESMA). The UK’s Financial Conduct Authority made the same designation just seven months later. These milestones also saw EDW come full circle to return to the role of educator and guide amid new regulatory architecture.
“There was a sense of deja vu in 2021,” says Thun. “When we became a repository under ESMA, we were back helping banks to make sure they understood and could comply with the new requirements.” The difference was that EDW was helping banks in a new world it had helped create. A world where comprehensive, thorough, and precise data reporting was no longer an aspiration but the norm.
“This kind of disclosure is now mainstream and that alone is a massive achievement,” says Thun. “The fact that you have access to information with this level of granularity, transparency, and standardisation and for free to investors - that’s absolutely unique. One of the true benefits is that so many investors use this transparency to make better, more informed decisions.”
EDW’s data repository continues to grow, offering new insights and analytics. ESMA introduced ESG-related data disclosures in late 2020, making energy performance certificate (EPC) data mandatory in asset classes like housing and auto loans.
EDW now has EPC data for some 2.5 million cars and 500,000 mortgages. “We often get questions from investors looking to assess how green a given deal or product is,” says Thun. “They increasingly invest in green securitizations, and the available data necessary to analyse this is growing as we speak. It’s helping the market to develop and offer greener alternatives to meet this demand.”