19 th XBRL International Conference Reducing regulatory burden
19 th XBRL International Conference “Reducing regulatory burden with XBRL: a catalyst for better reporting” June 22 -25, 2009 Paris, France European Banking Supervision: COREP and FINREP Taxonomies Roadmap Ignacio Boixo, Banco de España Katrin Schmehl, Deutsche Bundesbank 24 th June 2009
European Financial Stability
European System of Financial Supervisors Steering Committee European Banking Authority (EBA) European Insurance and Occupational Pensions Authority (EIOPA) European Securities Authority (ESA) National Banking Supervisors National Insurance and Pensions Supervisors National Securities Supervisors ESFS: Micro-prudential information
Collect micro-prudential information • The European Supervisory Authorities should be responsible for the aggregation of all relevant micro-prudential information emanating from national supervisors. • A Central European Database should be established and managed by the European Supervisory Authorities. • The information would be available for the relevant authorities in colleges of supervisors
European Supervisory Authorities • New European Supervisory Authorities working in tandem with the national financial supervisors…. building upon the existing structures • Opposed to solutions such as full centralisation of supervision • Strengthened framework will be up and running in 2010. The information may be forwarded in aggregated and/or anonymous format to the ESRC.
European System of Financial Supervisors Three European Supervisory Authorities • European Banking Authority (EBA) • European Insurance and Occupational Pensions Authority (EIOPA) • European Securities Authority (ESA) Appropriate national supervisory authorities Cross-sectoral cooperation, in addressing crosssectoral challenges, including financial conglomerates
Race is just started! European Commission proposed on May 27 http: //ec. europa. eu/internal_market/finances/docs/committees/supervision/communication_may 2009/C-2009_715_en. pdf ECOFIN: European Ministries of Economy approved on June 9 http: //register. consilium. europa. eu/pdf/en/09/st 10862. en 09. pdf European Heads of State or Government endorsed on June 18 http: //www. consilium. europa. eu/uedocs/cms_data/docs/pressdata/en/ec/108622. pdf
COREP and FINREP roadmap 2009 2010 2011 2012 2013 COREP FINREP Design phase Consultation phase Decision phase Transposition phase Application phase Note: Possible changes to the Capital Requirements Directive are in discussion!
Collaborative Tasks in Detail Business Experts Track Identification of the measures Identification of common elements Taxonomy Development Track Normalisation of the templates Business Experts Track / Taxonomy Development Track Identification of IFRS elements relevant for FINREP Definition of the • • data types Instant or duration Debit or credit Common labels
Collaborative Tasks in Detail Business Experts Track Definition of validation rules Preparation of meaningful test cases Taxonomy Development Track Creation of schema matrixes Business Experts Track / Taxonomy Development Track Quality insurance by peer-2 -peer review and business review Taxonomy Development Track Definition of design principles for the FINREP taxonomy
Collaborative Tasks in Detail Taxonomy Development Track Creation of a draft FINREP taxonomy Taxonomy Development Track Reverse engineering into schema matrix by an application and alignment check with agreed schema matrix Preparation of test cases Taxonomy Development Track Public review period
Further Tasks Taxonomy Development Track Definition of design principles on formulas Taxonomy Development Track Creation of the European formula linkbase Taxonomy Development Track Creation of documentation on taxonomy architecture
Identification of the measures and dimensions Business Experts Track Identification of the measures Identification of common elements dimension measures Makes FINREP understandable for IT purposes !
Normalisation of the templates Taxonomy Development Track Normalisation of the templates dimension measures No impact on changes in the presentation !
Identification of IFRS elements FINREP IFRS Business Experts Track / Taxonomy Development Track The amount of fitting elements could be relatively small. Identification of IFRS elements relevant for FINREP
Creation of schema matrixes Taxonomy Development Track Creation of schema matrixes What the supervisors ask for! EXCEL view What is being defined by IT! XBRL view
Creation of schema matrixes Taxonomy Development Track Creation of schema matrixes EXCEL view XBRL view Schema matrix view
Design principles Taxonomy Development Track Definition of design principles for the FINREP taxonomy One schema for the primaries One schema per dimension . XSD common primaries. XSD i m p o r t s template. XSD
Design principles Comprehensive Error Messages Taxonomy Development Track Definition of design principles for the FINREP taxonomy XBRL dimensional error messages aren’t sufficient. Element name is not comprehensive. Banking supervisors work with national labels or position numbers. When labels essentially change, the element names would be adapted.
Design principles Taxonomy Development Track Definition of design principles for the FINREP taxonomy Comprehensive Error Messages When the element name is not comprehensive, p-sd: Conversion. Factor. Applied why not using a codification? p-sd: p 122365 Advantages: + Easier to read by technical staff + Size of the instance is considerably smaller + More stability
Design principles Comprehensive Error Messages Taxonomy Development Track Definition of design principles for the FINREP taxonomy Solution: + Usage of formula linkbase + Assignment of an error description + Definition of error description in national languages Taxonomy: Instance: <p-sd: p 122365>150. 00</p-sd: p 122365> Conversion. Factor. Applied Possible validation result: The value of Conversion. Factor. Applied should be smaller than 100. 00 but the reported value is 150. 00.
Design principles Taxonomy Development Track How to modularise the European taxonomy Definition of design principles for the FINREP taxonomy n Linkbase io it in f e D using the y b d e in f e D XBRL dimensional error messages aren’t comprehensive. Possible validation result: The following check is not valid: inkbase L la u m r o F using the y b d e in f De “p 122365 | s 1 | c 1” : Conversion. Factor. Applied | Scope of Consolidation | CRD
Design principles Taxonomy Development Track Definition of design principles for the FINREP taxonomy To be discussed: + Usage of open / closed hypercubes + Usage of default values + Usage of typed dimensions + Definition of administrative data (header information) + How to define European formulas + Reduction of constraints
Test cases and examples Taxonomy Development Track Preparation of test cases + Creation of XBRL formulas on basis of Excel formulas defined in the spreadsheets + Creation of sample test cases based on the provided numbers
Modularisation Current situation ! How changes were adapted to the national needs? Expected: Custom report FINREP superset of reports Sreport mall Large Medium report Custom Realised: report Custom report Sreport mall Medium report Custom report
Modularisation Situation in the future! How changes will be adapted to the national needs? European Approach National Approach Linkbase n io it in f e D CEBS taxonomy. XSD inkbase Formula L base(s) Label Link CEBS taxonomy. XSD inkbase L n io t a t n Prese No changes on concepts ! Only additional linkbases ! inkbase Formula L ) base(s Label Link inkbase L n io t a t n Prese National taxonomy. XSD inkbase Formula L base(s) Label Link inkbase L n io t a t n Prese
Best Practices + Harmonisation efforts on basis of the XBRL instances
Deliverables What is going to be provided? European Approach kbase in L n io it in Def CEBS taxonomy. XSD inkbase L la u m r o F Schema matrixes base(s) Label Link n Presentatio Linkbase Header taxonomy. XSD kbase Label Lin + Test cases + Taxonomy Architecture Documentation + Formula Documentation
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