Legal Entity Identifier

== History ==

== History ==

During the [[2008 financial crisis]], regulators realised that a single identification code unique to each financial institution was not available worldwide. It means that each country had different code systems to recognize the counterpart corporation of financial transactions. Accordingly, it was impossible to identify the transaction details of individual corporations, identify the counterpart of financial transactions, and calculate the total risk amount. This resulted in difficulties in estimating individual corporation's amount of risk exposure, analyzing risks across the market, and resolving the failing financial institutions. This is one of the factors that made it difficult for the early evolution of the [[2008 financial crisis]].{{Cite web|url=https://www.forbes.com/sites/tomgroenfeldt/2011/08/24/legal-entity-identifier-lei-id-code-for-banks-and-subs-delayed-until-2012/|title=Legal Entity Identifier (LEI) ID Code for Banks and Subs Delayed Until 2012 |date=August 24, 2011|first=Tom|last=Groenfeldt|website=Forbes}}

During the [[2008 financial crisis]], regulators realised that a single identification code unique to each financial institution was not available worldwide. It means that each country had different code systems to recognize the counterpart corporation of financial transactions. Accordingly, it was impossible to identify the transaction details of individual corporations, identify the counterpart of financial transactions, and calculate the total risk amount. This resulted in difficulties in estimating individual corporation's amount of risk exposure, analyzing risks across the market, and resolving the failing financial institutions. This is one of the factors that contributed to the [[2008 financial crisis]].{{Cite web|url=https://www.forbes.com/sites/tomgroenfeldt/2011/08/24/legal-entity-identifier-lei-id-code-for-banks-and-subs-delayed-until-2012/|title=Legal Entity Identifier (LEI) ID Code for Banks and Subs Delayed Until 2012 |date=August 24, 2011|first=Tom|last=Groenfeldt|website=Forbes}}

In response, the LEI system was developed by the 2011 [[G20]]{{cite web|title=What is the LEI system?|url=http://openleis.com/info/about_the_LEI_system|website=Open LEIs|access-date=26 May 2016}} in response to this inability of financial institutions to identify organizations uniquely, so that their financial transactions in different national jurisdictions could be fully tracked.{{cite web|title=The Legal Entity Identifier (LEI) Is Good News for Financial Technology Developers|url=https://www.data.gov/consumer/legal-entity-identifier-lei-good-news-financial-technology-developers/|website=Data.gov|date=21 May 2014|access-date=26 May 2016|archive-date=26 May 2016|archive-url=https://web.archive.org/web/20160526193130/https://www.data.gov/consumer/legal-entity-identifier-lei-good-news-financial-technology-developers/|url-status=dead}} Currently{{When|date=August 2025|reason=As of (date) would be better since we don't know when "currently" is here.}}, the Legal Entity Identifier Regulatory Oversight Committee (LEI ROC), a coalition of financial regulators and central banks across the globe, is encouraging the expansion of the LEI. The U.S. and European countries require corporations to use the legal entity identifier when reporting the details of transactions with over-the-counter derivatives to financial authorities.{{cn|date=July 2020}} Today, authorities of 45 jurisdictions mandate the use of LEI code to identify legal entities involved in different financial transactions.{{cn|date=July 2020}}

In response, the LEI system was developed by the 2011 [[G20]]{{cite web|title=What is the LEI system?|url=http://openleis.com/info/about_the_LEI_system|website=Open LEIs|access-date=26 May 2016}} in response to this inability of financial institutions to identify organizations uniquely, so that their financial transactions in different national jurisdictions could be fully tracked.{{cite web|title=The Legal Entity Identifier (LEI) Is Good News for Financial Technology Developers|url=https://www.data.gov/consumer/legal-entity-identifier-lei-good-news-financial-technology-developers/|website=Data.gov|date=21 May 2014|access-date=26 May 2016|archive-date=26 May 2016|archive-url=https://web.archive.org/web/20160526193130/https://www.data.gov/consumer/legal-entity-identifier-lei-good-news-financial-technology-developers/|url-status=dead}} Currently{{When|date=August 2025|reason=As of (date) would be better since we don't know when "currently" is here.}}, the Legal Entity Identifier Regulatory Oversight Committee (LEI ROC), a coalition of financial regulators and central banks across the globe, is encouraging the expansion of the LEI. The U.S. and European countries require corporations to use the legal entity identifier when reporting the details of transactions with over-the-counter derivatives to financial authorities.{{cn|date=July 2020}} Today, authorities of 45 jurisdictions mandate the use of LEI code to identify legal entities involved in different financial transactions.{{cn|date=July 2020}}