LEI: The ‘Linchpin’ to Understanding the Health and Safety of the Finance Industry
As GLEIF celebrates its tenth anniversary, John Bottega, president of the EDM Council, reflects on how GLEIF has emerged as the guardian of a system designed to regulate the Legal Entity Identifier (LEI), a unique identifier that ensures accurate and reliable identification of parties involved in transactions.
Author: John Bottega, President, EDM Council
Date: 2024-07-15
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In the wake of the financial crisis, the Global Legal Entity Identifier Foundation (GLEIF) was established by the Financial Stability Board (FSB) to address the critical issue of insufficient transparency in party identification in financial transactions.
John Bottega, President of the EDM Council, underscores the profound impact of trust and reliability in fostering international business relationships:
Congratulations to GLEIF on their 10-year anniversary! It is with great admiration and pride that I extend this sentiment and wish all who contributed to its success a heartfelt applause!
For some, the memories of the financial crisis may have faded, but those who lived through it will remember the enormous challenges we all faced. With the collapse of Bear Sterns and Lehman, a systemic impact ensued. The best minds and leaders from both the public and private sectors collaborated together to assess and act. As the industry reviewed its policies and models, one thing was clear – we needed a way to unambiguously identify the players in the market to not only address the current challenges but to ensure that preemptive analytics could be performed to potentially avoid a repeat of the crisis in the future.
With the publication of the “Linchpin” paper*, the industry banded together, public and private, to build an identification schema that could be used to accomplish this analytic task. Proposals and ideas were agreed to, but without an organization to put it all together, the realization of this approach would not have been achieved. Through the leadership of Gerard Hartsink (first Chair of GLEIF’s Board of Directors) and Stephan Wolf (first CEO of GLEIF), the GLEIF was formed, and the rest they say, is history.
Today, over 2.5 million LEIs have been issued globally. Corporate entities are better understood. Relationships are clearer. GLEIF has played a pivotal role in driving efficient operation and adoption. They have consistently advocated collaboration across industry, across the public and private sectors. And GLEIF has relentlessly worked to provide transparency in the finance industry through the global adoption of the LEI.
On their 10th year anniversary, congratulations! Yes, there is more work ahead but be resolute. The LEI is an important industry standard and is the ‘linchpin’ to understanding the health and safety of the finance industry.
*The ‘Linchpin’ paper was written in 2010 by Linda Powell and John Bottega, with contributions from many US and other regulators who would later join the Regulatory Oversight Committee (ROC), formed by the G20 to oversee GLEIF.
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John Bottega is the President of the EDM Council. He began working with the Council as an industry contributor in 2005 and served as Chairman from 2007 to 2014. He joined the Council’s executive team as a Senior Advisor in 2014 and took over as the Chief Executive in 2017.
John is a senior strategy and data management executive with more than 40 years of experience in the industry. Over his career, John has served as Chief Data Officer in both the private and public sectors, serving as CDO for Citi and Bank of America, as well as for the Federal Reserve Bank of New York, and head of data management for the US Department of the Treasury’s Office of Financial Research (OFR).
