And those jurisdictions which host the largest shares of derivatives activity already require that all counterparties to reportable derivatives transactions have LEIs. The benefits of adopting LEIs for financial stability are clear. For example, the use of the LEI in regulatory reporting facilitates the consistent identification of reporting entities and their counterparties.
LEIs also put regulators in a position to more effectively evaluate and assess counterparty exposure and financial risks. LEIs also serve the industry in a number of important ways: for instance, they help banks to manage risk, identify their customers, and counter money laundering and the financing of terrorism (AML/CFT).