Many firms discovered during the financial crisis that they could not aggregate counterparty exposures quickly and confidently, resulting in confusion and panic across the marketplace.

In response, the national supervisory authorities sponsored a new counterparty exposure data collection programme - known as the Top 20 Counterparty project - during the crisis. The project began in late 2008 and continued through the financial crisis and the recovery, before being handed over to the Bank for International Settlements in March 2013, where it was expanded into a more comprehensive Top 50 Counterparty report.

In a letter presenting the results to FSB chair Mark Carney, Sarah Dhalgren, chair of the supervisory group, says: "Firms' progress toward consistent, timely, and accurate reporting of top counterparty exposures fails to meet supervisory expectations as well as industry self-identified best practices."

While some firms have developed their information technology infrastructure to support improved counterparty reporting, many still rely on time-consuming and error-prone manual processes, the report notes.

Data quality is of particular concern, says Dhalgren, particularly given the reliance on accurate data collection and reporting by regulators and firms for stress-testing and collateral management.

"We believe that the supervisors of these firms must prioritise the effort within the scope of their own work and commit to impressing upon firms the importance of being able to quickly and accurately aggregate top counterparty exposures" she adds.

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