Technical Standards on supervisory reporting

1. Technical Standards on supervisory reporting XBRL UK 17 June 2013| London Meri Rimmanen| EBA Wolfgang Strohbach| EBA

2. Outline • Financial supervision in the EU – role of the EBA • Single rulebook and the case for harmonised supervisory data • Technical standards on supervisory reporting – main features • Facilitating implementation of supervisory reporting requirements

3. European System of Financial Supervision EU central banks EU supervisors ESFS Joint Committee ESRB EIOPA ESMA EBA Micro prudential Macro prudential

4. EBA regulatory tasks

5. Outline • Financial supervision in the EU – role of the EBA • Single rulebook and the case for harmonised supervisory data • Technical standards on supervisory reporting – main features • Facilitating implementation of supervisory reporting requirements

6. Technical Standards on supervisory reporting Objective: increase efficiency in reporting systems, enhance data analysis capabilities • Reporting before… and after… Supervisor 1 Supervisor 1 Group A, B, C Common framework Group A Supervisor 2 Supervisor 2 Group B Supervisor 3 Supervisor 3 Group C Different data definitions Common data definitions, instructionsSeveral formats Single format Different technologies IT standards

7. ITS on supervisory reporting - benefits • Directly applicable • No implementation, or interpretation of the Regulation on national level ensures common definitions and instructions • Technical translation of reporting requirements • Data point model and XBRL taxonomy • Common validation rules • Truly harmonised supervisory data • Helps supervisors to assess asset quality, risk concentrations, liquidity positions, conduct peer analysis, analyse risk parameters across institutions • Harmonised definitions, especially on forbearance, non-performing loans and asset encumbrance significantly enhance identification of potential systemic risks

8. The role of EBA – main objectives and tasks Main objectives: Establishing EU single rule book Promoting and enhancing quality and consistency of supervision Reinforcing oversight of cross-border groups Early warning of upcoming vulnerabilities Effective early intervention and bank resolution Main tasks: Develop binding technical standards, guidelines, recommendations Promoting common supervisory culture / supervisory practices Peer group analyses and peer reviews Monitoring effectiveness colleges EU-wide risk assessments and stress tests Risk dashboards Reacting on risk warnings Handling of emergency situations

9. EBA oversight tasks – data usage

10. Benefits of harmonised data • Data from banks across the EU provides a more comprehensive picture on exposures, risks, potential pockets of vulnerabilities • Peer analysis, identification of institutions posing systemic risk (outliers) • Provide high quality benchmarks for stress testing (harmonised definitions) and asset quality reviews • Improve analysis on concentration risk (large exposures, geographical breakdown of exposures) • Facilitate data sharing among competent authorities

11. Outline • Financial supervision in the EU – role of the EBA • Single rulebook and the case for harmonised supervisory data • Technical standards on supervisory reporting • Solvency • Financial reporting • Asset encumbrance • Large Exposures • Liquidity • Leverage ratio • Proportionality • Facilitating implementation of supervisory reporting requirements

12. ITS on supervisory reporting – what is covered • EBA to deliver ITS in the following areas of the Capital Requirement Regulation (CRR): • Art 99 Solvency reporting, financial reporting • Art 100 Asset encumbrance • Art 101 Mortgage exposures reporting • Art 394 Large exposures reporting • Art 415 Liquidity ratios reporting • Art 430 Leverage ratio reporting • Integrated approach to ITS development • Several ITS packaged as one EU Regulation which is directly applicable to all credit institutions and investment firms • Use of common structure/conventions/concepts/definitions

13. ITS on supervisory reporting – COREP • Reporting population, level of application and scope of consolidation • Credit institutions and investment firms • Consolidated level and individual level • CRD scope of consolidation • Frequency • Quarterly • Exception: semi-annually • Material operational risk losses (OPR Details) • Securitisation transactions (SEC Details) • Reporting delay 6 weeks • Compliance monitoring • Monitoring compliance of capital requirements regulation • Granular information on risk parameters, risk concentrations, securitised exposures • Based on the CEBS reporting guidelines

14. ITS on supervisory reporting - FINREP • Reporting population, level of application and scope of consolidation • IFRS institutions on a consolidated basis • National supervisory authorities may extend the implementation also to other institutions • CRD scope of consolidation • Frequency • Quarterly, semi-annually and annually • Reporting delay 6 weeks • Monitoring, IFRS-based reporting • Harmonised financial reporting following as much as possible IFRS • Some presentational options have been restricted in order to develop harmonised templates • In some cases the data requirements go beyond IFRS to provide data for risk assessment and analysis of systemic risks • Forbearance and non-performing loans reporting • Based on the CEBS reporting guidelines

15. ITS on supervisory reporting - Modules

16. Outline • Financial supervision in the EU – role of the EBA • Single rulebook and the case for harmonised supervisory data • Technical standards on supervisory reporting – main features • Facilitating implementation of supervisory reporting requirements

17. ITS on supervisory reporting - Data Point Model • What is the DPM? • A data point is a data element required in the reporting framework, i.e. each template cell will correspond to a data point, and different cells with the same meaning should correspond to the same data point. • The DPM is a data model that captures the information requirements of the reporting framework. • The DPM is a dimensional model, meaning that each data point is categorised by a set of elements of different dimensions. • Why the DPM? • Complex or dubious business concepts are broken down into more elementary concepts, in order to clarify the meaning of a data point. • The DPM expresses the reporting requirements at a logical level, without regard for any particular IT implementation. • The DPM bridges the gap between business and IT languages, providing a common ground of understanding. • The DPM will be the source for the generation of XBRL taxonomies.

18. ITS on supervisory reporting - Proportionality • Reporting requirements shall be proportionate to the nature, scale and complexity of the activities of the institutions • Proportionality included in different ways: • Size of an institution • Small institutions are exempted for some templates (asset encumbrance) • Non-significant activities/exposures/risk • Threshold for level of exposure/activity (Geographical breakdown, derivatives in leverage ratio) • Inherent proportionality • Templates reported only if a special approach/method is used or if institution has exposures (SEC, SEC details, IRB) • Reduced frequency • Templates where reduced frequency provides adequate data (Group structure, detailed and contingent asset encumbrance)

19. Facilitating implementation – Q&A mechanism • Uniform interpretation of data requirements across EU • Detailed instructions included in the ITS Annexes • Q&A tool on EBA website (as of July 2013) • Public can post their questions via a web tool • EBA will • Review, categorise and prioritise questions • Publish all answers • Translate answers where necessary

20. Facilitating implementation – General timeline

21. Facilitating implementation – amendments of the ITS • Currently under consultation • Asset encumbrance • Forbearance and Non-performing loans (FINREP) • Liquidity monitoring tools • The ITS will be amended with these parts after the consultations • Application dates will be later than 1 January 2014