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European Banking Supervision: COREP and FINREP Taxonomies Roadmap Ignacio Boixo, Banco de España Katrin Schmehl, Deutsche Bundesbank 24 th June 2009.

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Presentation on theme: "European Banking Supervision: COREP and FINREP Taxonomies Roadmap Ignacio Boixo, Banco de España Katrin Schmehl, Deutsche Bundesbank 24 th June 2009."— Presentation transcript:

1 European Banking Supervision: COREP and FINREP Taxonomies Roadmap Ignacio Boixo, Banco de España Katrin Schmehl, Deutsche Bundesbank 24 th June 2009

2 European Financial Stability

3 European System of Financial Supervisors National Banking Supervisors National Insurance and Pensions Supervisors National Securities Supervisors European Insurance and Occupational Pensions Authority (EIOPA) European Banking Authority (EBA) European Securities Authority (ESA) Steering Committee ESFS: Micro-prudential information

4 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

5 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.

6 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

7 Race is just started! European Heads of State or Government endorsed on June 18 European Commission proposed on May 27 ECOFIN: European Ministries of Economy approved on June 9

8 COREP and FINREP roadmap COREP FINREP Design phase Consultation phase Decision phase Transposition phase Application phase Note: Possible changes to the Capital Requirements Directive are in discussion!

9 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

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

11 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 Public review period Taxonomy Development Track Preparation of test cases

12 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

13 Business Experts Track Identification of the measures Identification of common elements m e a s u r e s d i m e n s i o n c o m m o n e l e m e n t s Makes FINREP understandable for IT purposes !

14 Taxonomy Development Track Normalisation of the templates d i m e n s i o n d i m e n s i o n measures No impact on changes in the presentation !

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

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

17 Taxonomy Development Track Creation of schema matrixes EXCEL viewXBRL view Schema matrix view

18 Taxonomy Development Track Definition of design principles for the FINREP taxonomy One schema for the primaries One schema per dimension.. dimension.XSD common primaries.XSD template.XSD importsimports

19 Taxonomy Development Track Definition of design principles for the FINREP taxonomy Comprehensive Error Messages XBRL dimensional error messages arent 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.

20 Taxonomy Development Track Definition of design principles for the FINREP taxonomy Comprehensive Error Messages When the element name is not comprehensive, why not using a codification? p-sd:ConversionFactorApplied p-sd:p Advantages: + Easier to read by technical staff + Size of the instance is considerably smaller + More stability

21 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 ConversionFactorApplied Possible validation result: The value of should be smaller than but the reported value is. ConversionFactorApplied Taxonomy: Instance:

22 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 arent comprehensive. Possible validation result: The following check is not valid: p | s1 | c1 : ConversionFactorAppliedScope of ConsolidationCRD Defined by using the Formula Linkbase ||

23 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

24 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

25 How changes were adapted to the national needs? Large report Medium report S mall report Custom report FINREP superset of reports Expected: Custom report Realised: Medium report S mall report Custom report Custom report Current situation !

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

27 + Harmonisation efforts on basis of the XBRL instances

28 What is going to be provided? Definition Linkbase Formula Linkbase CEBS taxonomy.XSD Label Linkbase(s) Presentation Linkbase European Approach Schema matrixes Header taxonomy.XSD Label Linkbase Test cases Taxonomy Architecture Documentation Formula Documentation

29 Questions?


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