NEW FINREP

1. NEW FINREP Jean-Michel DELAVAL 19 November 2009

2. Outline • ) FINREP Guidelines • ) Maximum Data Model and Revised FINREP • ) Templates 4) IT issues 5) Next steps

3. Current FINREP • In 2005, European Commission endorsed the IAS/IFRS and created an unique opportunity to increase comparability of information produced by credit institutions for their respective national supervisory authorities • Therefore, the FINREP was based on IAS/IFRS and was created with the aim to standardise information received by supervisors across Europe.

4. 1) Current FINREP • In October 2007, CEBS published an assessment on convergence regarding supervisory reporting • Almost full convergence on core templates but less convergence on non-core templates • Notwithstanding these initial achievements, CEBS recognised that more work is needed

5. Aims of the amendment: 1 – streamline financial reporting 2 – improve convergence and harmonization in EU 1) FINREP Guidelines revised

6. 2) FINREP Guidelines revised • Main “policy” changes • Maximum data model : the revised Guidelines explicitly sets minimum and maximum reporting requirements based on a common set of data definitions • No national discretions allowed under Finrep framework • Drop most of the options (e.g. information that could be required throughout the framework) • Keep the strong link with IFRSs including additional information only if strictly necessary for supervisory assessment of banks

7. 2) Maximum Data Model • This Maximum Data Model has been achieved after intensive work of revision of current templates and after appropriate assessment of additional information collected at national level using the option provided in the current Guidelines • Main advantage for cross border groups: it should be crystal clear what is the maximum IFRSs based reporting requirement throughout Europe

8. 2) Templates • Core information • Consolidated Balance Sheet (or Statement of Financial Position) • Assets • Liabilities • Equity • Consolidate Income Statement (so called Separate Income Statement according to IAS 1, par. 81 (b))

9. 2) Templates • Non-core information (notes and other templates) • These templates are a breakdown of items already included in the core information and take into account also what is defined in IAS 1, paragraph 10 as a “complete set of financial statements” (e.g. table 21 “Statement of comprehensive income” and table 22 “Statement of changes in equity”).

10. Reporting dates: Quarterly Semi-annually Annually 31 March 30 June 30 September 31 December Frequency: Corridor between 20 and 40 business days Option to collect audited data referred to 31 December (annual reporting) depending on the national legislation implementing the Transparency Directive (related to the publication of audited year-end results) 2) FINREP Guidelines revised

11. 2) Maximum Data Model • Scope of Finrep framework • Reporting at consolidated and subconsolidated level • Not solo reporting, but Member States are free to implement Finrep at solo level too • Pillar 2 templates (for instance liquidity risk, country risk, interest rate risk) • Statistical reporting to European Central Bank, International Monetary Fund or Bank of International Settlements

12. 3) Templates • Core information: main changes • Assets • new concept of “cash” instead of “cash and cash balances with central banks” • counterparty breakdown (revised) only in template 5 • details of equity instruments available only in non-core • Revised for IFRS scope (insurance activities) • Liabilities • drop of “deposits from central banks”; included under relevant portfolio • new counterparty breakdown (consistent with asset side) • drop of “liabilities associated with transferred financial assets”; included under relevant portfolio

13. 3) Templates • Core information: main changes • Equity • addition of items related to investments accounted for using the equity method • Income Statement • Limited changes for consistency with Balance Sheet changes

14. 3) Templates • Non-core information: main changes • Financial instruments disclosure • revised breakdown on derivatives • revised counterparty breakdown for financial assets and financial liabilities • introduction: • geographical breakdown • breakdown of loans and advances • breakdown of interest income and expenses by product and counterparty • hierarchy of fair value and prudential data • Asset management

15. 3) Templates • Non-core information: main changes • Other templates • streamlined: • property, plant and equipment and investment property • related party disclosure • defined benefit plans • statement of changes in equity (former “analysis of equity”) • gains and losses from hedge accounting • other operating income and expenses

16. 3) Templates • Non-core information: main changes • Other templates • dropped: • non current assets and disposal groups classified as held for sale • staff expenses and general and administrative expenses • reconciliation of statutory tax to effective tax • profit or loss after tax from discontinued operations • information on leasing • cash flow statement

17. 4) IT issue • CEBS still recommends the use of XBRL for reporting purpose • It will develop the revised version of Finrep XBRL taxonomy taking into account adequate link with IFRS GP Taxonomy • The adoption of XBRL taxonomy will probably lead to greater harmonisation of IT formats • The revised Finrep XBRL taxonomy will be based on the same concepts used in the Corep taxonomy

18. 5) Next steps • A) In 2009 and 2010, revisions of IAS 39 in three phases : • Classification and measurement in 2009 • Impairments in 2010 • Hedge accounting in 2010 • When new IFRS are endorsed by EU commission, a dedicated task force will be created to change the FINREP in 2010 • B) Main target remains to implement the new FINREP in 2012

19. Now it is your time ! Thank you! 19