European Banking Supervision: COREP and FINREP Taxonomies Roadmap

1. 19th XBRL International Conference“Reducing regulatory burden with XBRL: a catalyst for better reporting”June 22-25, 2009Paris, France European Banking Supervision: COREP and FINREP Taxonomies Roadmap Ignacio Boixo , CEBSKatrin Schmehl, Deutsche Bundesbank24th June 2009

2. 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

3. European Financial Stability http://ec.europa.eu/internal_market/finances/docs/committees/supervision/communication_may2009/C-2009_715_en.pdf

4. European financial supervision

5. 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

6. 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.

7. 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 cross-sectoral challenges, including financial conglomerates

8. European Council agreed on June 18 Run is already started!

9. Collaborative Tasks in Detail Business Experts Track Definition of validation rulesPreparation of meaningful test cases Taxonomy Development Track Creation of schema matrixes Business Experts Track / Taxonomy Development Track Quality insurance by peer-2-peer reviewand business review Taxonomy Development Track Definition of design principles for the FINREP taxonomy

10. 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 Taxonomy Development Track Preparation of test cases Taxonomy Development Track Public review period

11. 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

12. Identification of the measures and dimensions Business Experts Track Identification of the measures Identification of common elements dimension measures common elements Makes FINREP understandable for IT purposes !

13. Normalisation of the templates Taxonomy Development Track Normalisation of the templates measures dimension dimension No impact on changes in the presentation !

14. Identification of IFRS elements FINREP IFRS Business Experts Track / Taxonomy Development Track Identification of IFRS elements relevant for FINREP The amount of fitting elements could be relatively small.

15. Creation of schema matrixes Taxonomy Development Track Creation of schema matrixes What the supervisors ask for! What is being defined by IT! EXCEL view XBRL view

16. Creation of schema matrixes Taxonomy Development Track Creation of schema matrixes EXCEL view XBRL view Schema matrix view

17. imports . . dimension.XSD template.XSD common primaries.XSD Design principles Taxonomy Development Track Definition of design principles for the FINREP taxonomy • One schema for the primaries • One schema per dimension

18. Design principles Taxonomy Development Track Definition of design principles for the FINREP taxonomy Comprehensive Error Messages • 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.

19. 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:ConversionFactorApplied why not using a codification? p-sd:p122365 Advantages: + Easier to read by technical staff+ Size of the instance is considerably smaller+ More stability

20. Possible validation result:The value of should be smaller than 100.00 but the reported value is . ConversionFactorApplied 150.00 Design principles Taxonomy Development Track Definition of design principles for the FINREP taxonomy Comprehensive Error Messages Solution: + Usage of formula linkbase+ Assignment of an error description+ Definition of error description in national languages Taxonomy: Instance: <p-sd:p122365>150.00</p-sd:p122365> ConversionFactorApplied

21. Possible validation result:The following check is not valid: “p122365 | s1 | c1” : Defined by using the Formula Linkbase | | ConversionFactorApplied Scope of Consolidation CRD Design principles Taxonomy Development Track Definition of design principles for the FINREP taxonomy How to modularise the European taxonomy Defined by using the Definition Linkbase XBRL dimensional error messages aren’t comprehensive.

22. 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

23. 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

24. Custom report Realised: Custom report Small report Medium report Custom report Modularisation Current situation ! How changes were adapted to the national needs? Expected: FINREP superset of reports Custom report Large report Small report Medium report

25. National Approach Definition Linkbase CEBS taxonomy.XSD Formula Linkbase Label Linkbase(s) Presentation Linkbase No changes on concepts ! Only additional linkbases ! National taxonomy.XSD Formula Linkbase Label Linkbase(s) Presentation Linkbase Modularisation Situation in the future! How changes will be adapted to the national needs? European Approach Definition Linkbase CEBS taxonomy.XSD Formula Linkbase Label Linkbase(s) Presentation Linkbase

26. Best Practices + Harmonisation efforts on basis of the XBRL instances

27. Schema matrixes Header taxonomy.XSD Label Linkbase European Approach Definition Linkbase CEBS taxonomy.XSD Formula Linkbase + + + Test cases Taxonomy ArchitectureDocumentation FormulaDocumentation Label Linkbase(s) Presentation Linkbase Deliverables What is going to be provided?