The head of Europe’s financial watchdog said the regulator is working to turn securities finance data into intelligence, although the group’s analytical capabilities need to be improved.

Speaking in Madrid on June 19, Steven Maijoor, chair of the European Securities Markets Authority (Esma), said that the organisation is in a “unique position to exploit information” from upcoming stock loan and repo rules.

However, he added that the group’s analytics capabilities “lagged” due to lack of investment and addressing this should be a priority.

Parts of the EU’s Securities Financing Transactions Regulation (SFTR) are already live but reporting rules do not kick until April 2020.

The regulation requires firms to report details of their sec finance trades to a trade repository.

These data warehouses will then send the information to Esma and national authorities.

“Expectations for SFTR are high," Maijoor added. "We, as regulators, are expected to gain good insights."

When it comes to future SFTR data uses, Maijoor said central banks could use the information to shape their monetary policy decisions.

Regulators, meanwhile, will be able to calibrate future rules, such as haircuts on collateral.

The data is also likely to be used to assess the build up of leverage and shed light on the re-use and reinvestment of cash collateral, Maijoor added.

In March Esma opened a public consultation on draft guidelines on how to report securities finance trades under SFTR.