Administrative burden measurement program - XI European Banking Supervisors XBRL Workshop

1. Administrativeburdenmeasurement program -XI European Banking Supervisors XBRL Workshop 20 November 2009: 11.00 – 11.45 Kurt Cogghe

2. Agenda

3. EU project onadministrativeburdenmeasurement and reduction • The European Commission is driving an ambitious strategy to measure and reduce administrative burden for businesses imposed by current EU legislation. • In January 2007, the Commission presented an ambitious Action Programme, endorsed by the Spring European Council in March 2007, aimed at reducing administrative burden on businesses in the EU by 25% in 2012. • The Action programme uses the Standard Cost Model of the EU to identify information obligations, representing the largest administrative costs on businesses in the selected priority areas, in order to measure and develop reduction recommendations. • The Consortium consisting of Deloitte Consulting, Capgemini Consulting and Ramboll Management has been engaged to manage the EU AB project. • The project started in September 2007 and will now be extended to prolongue the efforts of the Consortium. • The Commission will launch a big communication on the Action Programme in October 2009. This communication will include the study results, the initiatives taken by the DG’s and the Member States to implement the recommendations as well as the programme’s next steps.

4. Scope of the measurementwork Total EU law EU AB program 13 Priority Areas are selected Within 13 Priority Areas, 43 EU legislative acts are covered 13 Priority Areas 43 Legislative acts Based on mapping of IOs stemming from 43 legislative acts, 20% of IOs are measured (workshop / interview) and the cost of 80% remaining IOs is estimated by experts EU IOs IOs to be measured Expert estimations For every priority area, field measurements are gathered in 6 member states; Data from 4 Member States with existing measurements are used as well. For the 17 remaining Member States, data are estimated based on measurements from other Member States. 17 Member States 4 MS 6 MS Total number of companies 5 companies For every IO to be measured, 5 companies are interviewed. € The measurement results are extrapolated to obtain results in the 27 Member States

5. The project scope is unique in itssize… Measuring administrative burden stemming from 43 pieces of legislation expected to account for 80% of total EU red tape  Unique coverage of 13 policy domains 7 1 Food Safety Agriculture and Agricultural Subsidies 8 2 Pharmaceutical Legislation Company Law 9 3 Public Procurement Cohesion Policy 10 4 Statistics Environment 11 5 Value Added Tax Financial Services 12 6 Transport Fisheries 13 Working Conditions

6. …as well as in itscomplexity An innovative methodology allowing us to identify the administrative cost at European level and to quantify potential reductions in red tape  Analysis covering 27 Member States

7. Agenda

8. Maximum reductionpotentialcanberealisedthrough a combination of legalchanges, processoptimisations and e-Governmentsolutions Legal 9% ReductionInitiatives at EU Level ReductionInitiatives at National Level 24% 61% 6% E-Government Process Interoperability / Harmonisingstandards

9. Overall measurementresultsfor the 13 Priority Areas • The following table provides a detailed overview of the total administrative cost, the business-as-usual costs (BAU) and administrative burden distribution across the measured Priority Areas.

10. Overall reductionpotentialresultsfor the 13 Priority Areas

11. Legal acts and IOs in scope for the FSI recommendation Legal acts: • Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions (recast): Article 74.2 – “Reporting of results of the verification of compliance with rules on the level of own funds”. • Directive 2006/49/EC of the European Parliament and of the Council of 14 June 2006 on the capital adequacy of investment firms and credit institutions (recast): Article 35.1-4 – “Reporting to competent authorities on compliance with rules.” • Directive 2002/83/EC Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002 concerning life assurance is also in scope for the part of the Recommendation relating to expanded use of XBRL for additional reporting requirements in future InformationObligations: • IO 1) “Reporting of results of the verification of compliance with rules on the level of own funds”, (Article 74, para. 2 of Directive 2006/48/EC • IO 2) “Reporting to competent authorities on compliance with rules” (Article 35(1-4) of Directive 2006/49/EC)

12. Mainfindingsfor the FSI • 49 EU requirements + 4 Possibilities mapped • Transposition resulted in 1,234 national requirements • Measurement was conducted in Italy, Lithuania, Luxembourg, Poland, Spain and Slovenia • The overall administrative cost for the selected pieces of legislation = €1,357 million EU-wide • Of the €1,357 million due to EU IOs and Possibilities, 53% (ca. €715 million) has been classified as administrative burden • Five IOs alone account for 96.5% of the total administrative cost arising from EU IOs

13. Most burdensome IOs identified for Financial Services

14. Frommeasurement to reduction of the burden • Assessment of different ways to reduce the burden: • Change of the legalframework • Processoptimisation • E-Governmentpotential • Initiatives at twolevels: • At European level • At national level (best practices) • Resultfor the 13 Priority Areas in scope of the project: More than 320 recommendations mapped 100 recommendations shortlisted 23 recommendation prioritised by the European Commission

15. Main Financial Services Recommendation (1) Harmonise the use of XBRL-based COmmon solvency ratio REPorting (COREP) in the EU and use as a basis for extension of XBRL reporting to other reporting requirements to and amongst supervisors Potentialburdenreduction: COREP harmonisation:substantial XBRL applied to further reporting requirements: substantial

16. Main Financial Services Recommendation (2)

17. Agenda

18. Interoperability advisory in current projects (1) • Position of XBRL in financialdatawarehousearchitecture. Use of XBRL forcorporateconsolidation: Deloitte’sconsolidation center of excellence. • EC DG Enterprise – ALIFE: administrativeburdenreduction, redesign of informationobligations. • EC DG Digit – Europeaninteroperabilitystrategy(IDABC): communicationbetweenmemberstates & the EU. • National institutions: taxonomyadvisory,…. ENTERPRISES NATIONAL GOVERNMENT SUPRANATIONALGOVERNMENT Variousclients - Financial DWH architecture- Consolidation Europeaninteroperabilitystrategy “ALIFE” Adminburdenreduction National institutions

19. Interoperability advisory in current projects (2)Supporting the European Interoperability Strategy Elaboration What legal and political issues are involved? Political evaluation, new laws,...? Politics and legal How does the managed service data maps on the information needs (eg. Semantics)? What information is needed to comply to political and legal constraints? Information exchange How are the services be concretised, what are the concrete interoperability requirements? How will we organize the information, what stakeholders are involved? Processes and organisation What services are useful to help gathering and managing the needed information? What technologies are involved, what procedures do we need to follow? - 18 - Service offerings

20. Agenda

21. Topics to takeintoconsideration • Financial crisis leads to pressurefor more regulation of FSI… • Lack of trust in FSI leads to demandfor direct controlalso at micro-level… • More regulation / controlleadstypically to more administrativeburden… • Financial institutions and governments / administrations are under high pressure to reducecosts… Processeswillneed to beimplemented in a costefficient and highlycoordinatedway (acrossfinancialinstitutions / nationalbanks / ECB / EC) … and all of this in an ever changing environment (cf. the reform of the Europeanfinancialsupervision)