18 th International XBRL Conference Leveraging XBRL in

18 th International XBRL Conference Leveraging XBRL in the Banking Industry Internationally Ignacio Boixo – Bank of Spain Luc Dufresne – National Bank of Belgium Yoshiaki Wada - Bank of Japan Jon Wisnieski – FDIC 1

18 th International XBRL Conference Leveraging XBRL in the Banking Industry Internationally European Banking Supervision Ignacio Boixo – XBRL Network Committee of European Banking Supervisors 2

Why Financial Information is necessary? Flow of Savings accounts capital $ Financial Intermediaries Flow of information Intermediaries Auditors and Accounting regulators Regulators of capital markets and financial institutions Business Firms Financial and information flows in a capital market economy. Paul Healy & Krishna Palepu, 2001. Information Asymmetry, Corporate Disclosure and the Capital Markets: A Review of the Empirical Disclosure Literature

Who is Who in European Banking Supervision Level 1: The Commission European Parliament Council Legislation Policy and implementation measures Level 2: Level 3: Convergence and supervisory cooperation 27 Countries European Banking Committee of European Banking Supervisors

European Banking Supervision. Vision § “While national supervisory authorities are free to decide on the technical transmission specifications to implement the reporting framework, CEBS considers that XBRL can be a helpful tool in constructing a harmonised European reporting mechanism. § CEBS will therefore develop an XBRL platform and make it available free of charge to national authorities and supervised institutions. XBRL taxonomies will be developed for both the COREP (COmmon REPorting Basel II-) and FINREP (FINancial REPorting -IFRS-) frameworks. ” Point 4, Cover Note to the Framework for Common Reporting of the New Solvency Ratio

Stack of Interoperability Layers Parliament and Int’l Bodies Guidelines Banking Supervisors Data description CEBS COREP&FINEP Networks Taxonomies CEBS XBRL Network Best Practices Board Format XBRL Standards Board Comm. & Security W 3 C, ISO… Business Information Tech. Agreements

Interoperability reduces regulatory burden § Reporting before… Group A and after… Supervisor 1 XBRL Group B Supervisor 2 Group A, B, C Common framework Supervisor 2 XBRL Group C Supervisor 3 Different templates and definitions Several formats Different technologies Supervisor 3 Common templates and definitions Single format XBRL recommended

Multiple incompatible Flows Bank X Internal Secu A Format Signature e-mail Secu A Bank. A Format Signature e-mail Bank. A FSA B Format Signature e-mail FSA B System Bank C Format Signature e-mail Bank C Insu C Format Signature e-mail Insu C

Man in the middle: Central Data Base TARGET 2 (Real Time Gross Settlement) Format, Signature and Mail by SWIFT Bank X Secu A Format Signature e-mail Secu A Bank. A Internal System Bank A FSA B Bank A Format Signature e-mail Bank C FSA B Format Signaturee-mail FSA B Bank C Insu C Format Signature e-mail Insu C

Man in the middle: Full Centralization TARGET 2 Securities (Straight Thru Processing) Format, Signature and Mail by SWIFT Bank X Secu A Internal Secu A Bank A FSA B System Format Signature e-mail FSA B Bank C Insu C Bank. A Format Signaturee-mail FSA B Bank C Insu C

Standards in Motion: Go live! IFRS & Basel II in EU Banking Supervision 2005 -2008 period Bank X Secu A Format Signature e-mail Secu A National Definitions XBRL Signature e-mail Bank. A Bank A Internal Format FSA B System Format Signature Format National Practices e-mail FSA B Bank C Signature e-mail Bank C National Extensions Insu C Format Signature e-mail Insu C

Standards in Motion: Interoperability IFRS & Basel II in European Supervision Long term vision Bank X Secu A Format Signature e-mail Secu A Internal Bank. A Bank A FSA B System XBRL Euro Test Site Format Signature e-mail FSA B Bank C Insu C Web 2. 0 Insu C

Key Developments • Uniformed Supervisory Definitions • Single Set of European Taxonomies • Taxonomy acknowledgement • Standards & Best Practices in all the layers Decimals, Rounding, Identification… Format, Security, E-mail…. • XBRL reference validator

18 th International XBRL Conference Thank you for your attention Ignacio Boixo XBRL Network Committee of European Banking Supervisors boixo@bde. es 14

18 th International XBRL Conference Leveraging XBRL in the Banking Industry Internationally Luc Dufresne - Head of Microeconomic information Department - National Bank of Belgium 15

Agenda § XBRL in Belgium § The XBRL project of the CBSO § Coordinating initiatives 16

XBRL Belgium § Non-profit institution founded on 22 November 2004 and became an established jurisdiction in 2006 § Hosted by the National Bank of Belgium § Founding members are regulators, public services, accounting and banking bodies

Actual developments in Belgium § Running as of today § XBRL regulatory bank reporting in Belgium § FINREP and COREP projects § The CBSO project § Collect of annual accounts § In progress § Federal Public Service Finance § Corporate tax return § Directorate-general Statistics and Economic Information § Structural business survey

Legal context of the CBSO project § Gathering and spread § The Central Balance Sheet Office collects annually 340. 000 annual accounts from 320. 000 companies and publishes the annual accounts as PDF files § Statistical mission § Data from standardized annual accounts are handled to produce accurate data for official bodies (National accounts) § Publication of statistics per activity sector

Phases of the project § First phase - Input flow § Gathering annual accounts in XBRL as from April 2007 § Increase the quality of annual accounts received § Second phase - Output flow § Availability of XBRL files for the users § Harmonizing the input and output format

Evaluation of phase 1 - Figures Annual accounts – Filing medium % Floppy Internet (forecast) Internet (actual) Paper

Second phase - Users and Needs § Users § § Regulators (Tax office, Commercial courts) Statisticians (National accounts, Business survey) Bank sector (credit risk) Data analysts § Needs § Format and publication speed (Banking sector for credit scoring) § Direct availability of XBRL files (Data providers, Regulators) 22

Output availability Figures Images XBRL 1984 2001 2009 Text file PDF XBRL Only quantitative data Full 1 => 3 weeks 3 days Data processing Y N Y Exhaustiveness Y Y Not for accounts filed on paper Since Format Information Elapsed time

XBRL broadening § To broaden the area of XBRL at national level § Through collaboration with other regulators to develop national taxonomies § Starting from an operational application § Sharing and extending common modules Building blocks technique

The Tax project - a step forward for XBRL in Belgium § Overview § Important step towards a harmonized format among the Belgian regulators § Enhance the transparency of the financial information § Long term objectives § Reducing administrative burden for the companies asking information only once § Cutting down on fraud through immediate cross-checks between tax declaration and annual accounts

Architecture - Building blocks NBB taxonomies NIS Full taxonomy NPO Full Abbr taxonomy NPO Abbr Tax taxonomies taxonomy Data Type Core Taxonomy (Extended) GCD Taxonomy Identification data Value Lists Taxonomy (Extended) Common module

BOJ’s Experience in implementing XBRL Banking Panel at 18 th XBRL International Conference October 16, 2008, Washington DC 　Yoshiaki Wada 　Financial Systems and Bank Examination Department 　Bank of Japan yoshiaki. wada@boj. or. jp 27 © 2008 Bank of Japan

1. Introduction of the BOJ Ø　 Central Bank of Japan, established in 1882 Ø　 32 branches nationwide Sapporo Kushiro Hakodate Akita Niigata Matsumoto Head Office in Tokyo Okayama Hiroshima Kanazawa Matsue Shimonoseki Kobe Kitakyushu Oita Kumamoto Kagoshima Kochi Sendai Fukushima Maebashi Tokyo Yokohama Fukuoka Nagasaki Aomori Kyoto Osaka Takamatsu Kofu Shizuoka Nagoya 28 Matsuyama Naha

2．Monitoring Coverage of Financial Service Institutions BOJ covers about 570 FSIs and gathers various daily, weekly, monthly and annual data for monitoring. Monitoring data from about 570 FSIs Major Banks Regional Banks Importance of efficient data gathering scheme Shinkin Banks Foreign Banks Securities Firms, etc. Bank of Japan 29 © 2008 Bank of Japan

3．How we implemented XBRL (1) Three major issues to be solved: ü How to check whether XBRL is suitable for the BOJ’s data-gathering framework? ü How to make people aware of the merits of implementing XBRL? ü How to let people use XBRL? 30 © 2008 Bank of Japan

3．How we implemented XBRL (2) Our approaches to the issues (1): ü Step by step approach ⇒　From a small-scale closed trial to a large-scale open test ⇒　From a one-time trial to cycle tests over several months ü Public relations activities ⇒　Open seminar on XBRL, introduction of BOJ’s XBRL project to the public through the media 31 © 2008 Bank of Japan

4．How we implemented XBRL (3) Our approaches to the issues (2): ü Feedback of the latest technical advancements to the users ⇒　Adoption of the latest version of XBRL with Formula. Link ü Low cost and easy operational scheme ⇒　Development of tool for easily generating XBRL data and sharing it with FSIs free of charge 32 © 2008 Bank of Japan

5．Project history 2003 2004 2005 Preparation for testing 2006 2007 2008 Tool and taxonomy development Live Use of XBRL Feb 2006 Three-phase test ･Release of the Monthly B/S Taxonomy on banking a/c ･Release of the Taxonomy Setting Tool ･Release of the Monthly B/S Taxonomy on trust a/c ･Release of the Monthly Lending Rate Report Taxonomy ・Release of the Deposit Data Report Taxonomy 33 © 2008 Bank of Japan

6．The BOJ’s XBRL based reporting scheme Develop the taxonomy set according to the report type Ta Taxo 2 xo 3 IP-VPN FSIs ② D/L of necessary taxonomy set Check for errors using the function of Formula-Link and correct the file ① U/L of taxonomy set to the library ④ U/L of XBRL data ⑤ D/L of ＸＢＲＬ Error-free data files XBRL Earlier data release for BOJ’s users ③ＸＢＲＬ data creation and validation XBRL Data creation tool data Error-free data files XBRL Excel Taxonomy library BOJ Taxo 1 Taxonomy setting tool Post data validation Database Taxo 2 Select the taxonomy according to the report type © 2008 Bank of Japan 34

7． Review of the last 30 months of live use (1) 1. No down time ⇒ Our XBRL tool has worked without fatal problems. ⇒ The reliability of the tool and availability of the total reporting workflow were confirmed. 2．All FSIs submitted monthly B/S data in XBRL format ⇒ Although XBRL was not mandatory in our reporting scheme, all FSIs submitted data in XBRL format voluntarily. ⇒ FSI’s degree of recognition of the new reporting scheme increased steadily. 35 © 2007 Bank of Japan

7． Review of the last 30 months of live use (2) 3．Revision and re-distribution of the current taxonomy and the release of the new range of taxonomy ⇒ The taxonomies have been revised several times due to revisions to Japanese company law or the requirement for new data. ⇒ A new range of taxonomies, such as those for monthly B/S of trust accounts and lending rate reports, was released. 4．Enhancement of efficiency of FSIs’ reporting work and the BOJ’s data processing ⇒ Decrease in manpower required for data reporting in the FSIs and for database operation in the BOJ ⇒ Earlier release of the accurate data to the BOJ’s data users. 36 © 2007 Bank of Japan

8．Increased efficiency in the data reporting scheme (1) Changes of the BOJ’s business flow on the Monthly B/S data processing Early data release （2 to 4 days) Report deadline Preparation of data U/L Data U/L and validation within DB New Flow Data processing release for within DB BOJ users Short cut! Old Flow day X X+1 X+2~4 X+5 X+6 Error correction Data validation by XBRL, prior to data submission Reduction of post-validation cost © 2007 Bank of Japan 37

8． Example of enhancement of reporting efficiency(2) Reduction of the required part-time manpower in

9．Users’ evaluation of BOJ’s XBRL tools (1) ・Results of questionnaire about the usability of BOJ’s XBRL tools and reporting scheme, August 2008 Number of samples Number of responders Response rate 150 138 92. 0% Foreign banks 60 55 91. 7% Shinkin banks 267 237 88. 8% Total 477 430 90. 2% Domestically licensed banks, such as major banks, local banks 39 © 2008 Bank of Japan

9．Users’ evaluation of BOJ’s XBRL tools (2) Operability of X-Port 40 © 2008 Bank

9．Users’ evaluation of BOJ’s XBRL tools (3) Performance of X-Port ──　Total speed of data

9．Users’ evaluation of BOJ’s XBRL tools (4) Function of X-Port ──　Usefulness of pre-validation function

9．Users’ evaluation of BOJ’s XBRL tools (5) Function of X-Port ──　Usefulness of error comment

9. Users’ evaluation of BOJ’s XBRL tools (6) Contribution of X-Port for improving the

9．Users’ evaluation of BOJ’s XBRL tools (7) Other comments ・There was no request to stop XBRL reporting. In fact, some banks want the range of XBRL based reporting to be expanded. ──　“Since XBRL seems to be becoming a major reporting scheme in society, please expand the range of BOJ’s XBRL reporting” ──　“Data validation is very useful – we hope it is adopted for other reports” ・Some FSIs want a one-stop reporting scheme to reduce the reporting burden. ──　“Why is integrated reporting not possible? Why should the same information be submitted in Excel, XML and XBRL to different authorities? ” ・Many FSIs require functional linkage between X-Port and IP-VPN system. ──　“Could the data compression function of X-Port be integrated with the encryption function of IP-VPN? ” 45 © 2008 Bank of Japan

10．Some empirical feedback from the BOJ’ Project Key factors for smooth implementation: ü　Taxonomy with high maintainability ü　User-friendly tool ü　Well-designed reporting scheme ü　Well-organized project team 46 © 2008 Bank of Japan 46

11．BOJ’s XBRL Team 47 © 2008 Bank of Japan

All-Star Cast of my Data Center Section ! © 2008 Bank of Japan

Business Case for Formulas Jon Wisnieski Senior Information Systems Specialist

Agenda q XBRL Application q Formula Benefits q q Quality Standards and Business and Performance Metrics

XBRL Application q q Three banking agencies developed the Central Data Repository (CDR) q Used XBRL to define and transport data q Data receipt q Data validation q Storage q Distribution CDR launched on October 1, 2005 Key policy change ~ pre-validation using XBRL Very Successful implementation

Call Reporting Before XBRL q q Validation routines and formulas stored in and processed by two systems (FRB, FDIC) Banks submit data after some minimal checks in their software - inconsistencies between preparation software packages Software vendors receive Call Report metadata from Excel, PDF, and Word documents – cut and paste into their software Agency analysts would check data quality once files had been submitted and contact bankers with any questions – often 1 -3 weeks after initial submission

Call Reporting After XBRL q q q q FFIEC developed the XBRL-based CDR with Unisys Corporation as systems integrator Metadata stored in XBRL taxonomy files now available to anyone The same taxonomy files that contain validation criteria the agencies use in the CDR are used in Call Report software vendor packages Banks are required to check the quality of their data before submitting Agencies do not accept data with quality problems Quality assurance work is done by reporters up front, when it is more efficient Agencies receive high quality data sooner—lower cost

Benefits XBRL is Expressive q q … and therefore powerful A standard for expressing: q q the data to be exchanged the instructions for providing the data an interface or form or presentation the validation criteria for checking the quality of the data

Quality Standards What are they? q Formulas that are expressed in XBRL and shared with stakeholders q Evaluate to either ‘true’ or ‘false’ q Check a relationship that either must be true – or – that, if true, point to an anomaly to be researched

Quality Standards q q q Validity – equations that must hold true or the data is inaccurate Quality – data relationships that help identify anomalies Reportability – identify what financial concepts an entity should submit based on their structural or financial characteristics

Business and Performance Metrics What are they? q Modify data by (+, -, /, *) q Apply functions (annualize, %change) q Consistently applied across q q q Data Industry Comparability

Business and Performance Metrics q q q Capital Adequacy Asset Quality Earnings Liquidity Growth Rates Industry Standards q q Regulatory International ~ Basel II

Business and Performance Metrics Results—Everyone Sees the Same Data! q Taxonomy = authoritative source, used by all q q q Communication between all parties improved q q Rules for what data to report Data quality standards Banking agencies Call Report Software Vendors Financial institutions Increased Data Transparency Back to Contents

Questions - Comments?