Klaas Knot: The value of the LEI for Identification in digital processes

Speech by Mr Klaas Knot, President of the Netherlands Bank, at the GLEIF Meet the Market Event 2020, Amsterdam, 4 February 2020.

The views expressed in this speech are those of the speaker and not the view of the BIS.

This Meet the Market Event was hosted by the Global Legal Entity Identifier Foundation (GLEIF) and organized in coorperation with DNB. In his opening address, Klaas Knot outlined the background to the Legal Entity Identifier (LEI), and described the valuable role it can play in managing financial risks and enhancing the quality and accuracy of financial data. Mr Knot also emphasised how authorities and market participants alike can reap the benefits of more widespread adoption of the LEI. 

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Good afternoon, and welcome to 5-4-9-3-0-0-1-O-3-6-C-V-K-P-V-L-2-D-4-8. In other words, welcome to De Nederlandsche Bank.  

Of course, it is easier to call this place by its name. And not by its 20-character alpha-numeric code. But the Legal Entity Identifier - in short, LEI - is a valuable initiative and that is what we are here to discuss today. Before we do, let me share a bit of background, from my perspective about how and why the LEI was developed. And how you can play an important role in further expanding its use.  Thereby making the financial system a little bit safer one LEI at a time.  

Like many other regulatory innovations, the LEI was born out of the global financial crisis. The years leading up to the crisis saw a diverse range of legal entities trading on financial markets. Many of them were also part of much larger firms, even though this was not always clear. These financial conglomerates combined many different structures and activities. And they operated across many different jurisdictions.