1 / 18

Playing several roles today

Playing several roles today. As Director General of Regulation of the Bank of Spain As Chair of the Committee of European Banking Supervisors (CEBS) As Chair of XBRL-Spain. The importance of XBRL. Efficient markets depend on information

dimaia
Download Presentation

Playing several roles today

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Playing several roles today • As Director General of Regulation of the Bank of Spain • As Chair of the Committee of European Banking Supervisors (CEBS) • As Chair of XBRL-Spain

  2. The importance of XBRL • Efficient markets depend on information • A market is efficient if prices reflect all information on underlying asset(s) • But information is costly • To generate, transmit and use • XBRL promotes efficiency of information flows • For both the generators and users of financial information • This, in turn, promotes greater efficiency and efffectiveness for the system as a whole • Including through pricing that is based on more accurate and timely information and therefore that better reflects underlying realities • Public policy aspect of XBRL • Accuracy • Reliability • Speed

  3. CEBS • What is CEBS? • A high-level committee of representatives from the banking supervisory authorities and central banks of the European Union • What are its tasks? • To advise the European Commission on banking policy issues, in particular for the preparation of draft measures for the implementation of EU legislation • To foster consistent day to day implementation and application of Community legislation by issuing guidelines, recommendations and standards • To promote supervisory co-operation and provide for the exchange of supervisory information

  4. CEBS and initiatives on reporting • Current situation: 25 countries asking for different information - different definitions; different IT systems; incompatible formats • CEBS has taken two main initiatives to promote common reporting requirements: • 1. Common reporting of the solvency ratio (COREP): final publication 13 January 2006 • 2. Common reporting for financial data (FINREP): final publication 16 December 2005 • These initiatives take advantage of the fact that Basel II and IFRS will require all supervisors to change their reporting requirements • And XBRL provides the right technology at the exact moment it is needed most! • CEBS has decided in both initiatives to promote the use of XBRL with the development of two taxonomies.

  5. Why? • Expected benefits: • Level playing field: common reporting framework across the EU • Reducing administrative costs for banking groups (mainly for cross-border banks) • Removal of potential obstacles to financial market integration • Easier exchanges of information between supervisors • Increased cost effectiveness of supervisory activities in the EU • More flexible framework: across countries and over time • Improving the quality of information flows from reporting entities

  6. Advantages of implementing XBRL in EU (I) • XBRL will enable banks to fulfil the reporting requirements of supervisory authorities across the EU with a single IT standard • The costs of implementing EU common reporting in cross-border groups will be reduced • Less administrative and implementation costs • Small banks may benefit from a free standard like XBRL and from the economies of scale derived from the development of the XBRL taxonomy by CEBS • Less implementation costs • Also, supervisors may benefit from economies of scale • Increased cost effectiveness of supervisory activities due the use of IT STANDARDS

  7. Advantages of implementing XBRL in EU (II) • XBRL standard will facilitate the transmission of the common definitions expressed in common EU reporting • Level playing field and removal of obstacles for financial market integration • In short, the compatibility of formats, contents and IT systems supported by XBRL will allow supervisors to collect information on a decentralized way, while having all the functionalities as if a centralized data base were in place and benefiting from additional flexibility

  8. Report 25 ---------------------------------------------------------------------------------------------------------------------------------------------------------------- European Law: Basel II implementation Basel II European Law 9X,XX% Basel II compatible Directives 2000/12 & 93/6 Transposition into national Legislation Country 1 Country 2 Country 3 Country 25 National Regulation Auth. 1 Auth. 2 Auth. 3 Auth. 25 National Implementation Report 1 ------------------------------------ Report 2 Report 3 ---------------------------------------------------------------------------------------------------------------------------------------------------------------- XBRL challenge!

  9. XBRL Window of opportunity 2002 2003 2004 2005 2006 2007 2008 Too late • Operational: • Basel II • IFRS/IAS • ••• Today! Too early • Establishing: • CEBS • XBRL EU • •••

  10. XBRL in Spain • Spain’s involvement • Spain became an XBRL jurisdiction in 2004 • XBRL España Association is chaired by Banco de España (Central Bank and Banking Supervisory Authority of Spain). Public interest aspect of XBRL • Aim of XBRL España • To foster the introduction, adoption and development, both at a national and international level, of the XBRL language, for the purpose of unifying the standards applicable to financial and business reporting • Ultimate goal: • Facilitate the integration of the Spanish & European Financial Markets

  11. Activities of XBRL-Spain • Quick increase in the number of members in XBRL Spain, up to 40 • Cooperation between different regulatory agencies is one of the main targets • A number of XBRL taxonomies has been completed • XBRL has been implemented and now is in use • There has been a strong collaboration with other international taxonomies (i.e., COREP, IFRS-GP)

  12. Projects of Bank of Spain • SIIF: receiving public financial statements in XBRL • So far, only the main groups are included in this project • During 2006, the rest of the banking groups will join the project • Banks may re-use the information to report to other agencies (i.e. Securities Commission)

  13. Projects of Bank of Spain • Spain COREP: receiving capital information based on new CRD (EU’s Basel II). • Leading the XBRL project since the beginning. • Developing a national project during 2006, in order to start receiving information in 2007 • Cross-border Spanish banks may report the same information to other supervisory agencies in EU

  14. Projects of Bank of Spain • Spain FINREP: receiving supervisory reporting in XBRL • Implementing a harmonised financial reporting framework in EU • Participating in the development of the FINREP taxonomy • To be developed during 2007

  15. Other XBRL projects in Spain • General Identification Data: • Setting a common taxonomy to identify the reporting entity • General Accounting Plan: • To allow the reporting of non-financial companies according to local GAAP • Listed companies information: • Developed by the Spanish securities commission

  16. CONCLUSIONS • One of the strengths of XBRL is that it only needs a small critical mass • From the Spanish perspective, even just the Banco de España initiatives for banks’ reporting represent a huge step forward • But if we take all of the different initiatives together, e.g. • In Spain • In the EU (CEBS) • And more further afield (e.g. SEC initiatives) • We have a hugely potent tool • Template reporting is dead… • …Welcome to the era of tag reporting!

  17. Thank you for your attention

More Related