The Global Legal Entity Identifier System: Will It Deliver?

We examine the global legal entity identifier (LEI) system for the identification of participants in financial markets. Interviews with data professionals reveal substantial private benefits from using LEI to improve efficiency of business processes and smaller private benefits in counterparty and credit risk management. Very much larger social benefits, including monitoring of systemic financial risk, are achievable if it becomes the accepted universal standard for identification in all business processes. Therefore, to overcome adoption barriers, a clear road map is needed for its future development with initial priority given to applications in business operations and regulatory reporting.