Presentation on theme: "Secrétariat général de la Commission bancaire"— Presentation transcript:
1 Secrétariat général de la Commission bancaire COREP - FINREP - XBRLThe French Banking Commission approachVII European Banking Supervisors XBRL WorkshopMunich, may 2007Sylviane DELARUEJerome POUPARDCOFINREP ProjectSGCBCOREP - FINREP - XBRL
2 COREP- FINREP- XBRL The French Banking Commission approach 1 • Project objectives : a european framework2 • Consequences on our IT system3 • Challenge : managing complex taxonomies4 • The French Banking Commission COFINREP project5 • COFINREP : technical choices - XBRL learning curve
3 1. Project objectives : a european framework The objectives of Committee of European Banking Supervisors :Harmonising banking supervision practices in Europe, and developing a common supervisory cultureReducing unnecessary costs of reporting to the banking supervisors through European convergenceIn order to fulfill this goal, need for :The definition of a common frameworkA common vocabulary based on the European legislationA degree of flexibility in order to adapt to national specifics.
4 1. Project objectives : a european framework Two european initiatives :A common reporting for a common solvency ratio (COREP – COmmon REPorting)CRD Directives14 June 2006: final adoption of Directives 2006/48/CE et 2006/49/CECOREP13 January 2006: CEBS publishes COREP templates =>December 2005/ juin 2006 : Discussion with the banking industry on the French reportingAdoption of the French COREP project by the Banking Commission 26 March 2007
5 1. Project objectives : a european framework A common « supervisory financial » reporting for banks consolidated accounts in IFRS (FINREP, FINancial REPorting)European regulation introducing IFRS is directly applicable in EuropeEuropean reporting published by the CEBS on 16 December 2005 =>Adoption of the French FINREP project by the Banking Commission on 28 June 20061st remittance date for COREP and FINREP June in France
6 1. Project objectives : a european framework XBRL taxonomies built by the CEBS for COREP and FINREP are essential in order to create a common framework. They include :A common vocabulary for European supervisors, elaborated on the basis of official European regulations andA common « grammar » through its « Linkbases ».XBRL allows for a european flexible approach, including national specific elementsBut XBRL standard must also keep pace with the evolution of business requirements, and the complexity of COREP and FINREP reportings.
7 2 • Consequences on our IT system The French Banking Commission decided to make it mandatory for the banks to transmit their COREP and FINREP reports, using the XBRL standard for reasons of efficiency and cost.The working relation between banks and the BC will change only marginally :The General Secretary of the Banking Commission has provided the banks with the adapted French version of the European taxonomiesThe financial institutions will transmit their reports (instance documents according to XBRL vocabulary) XML/XBRL, via the usual data transmission meansAfter verification of data quality, anomalies will be restituted to each institution
8 2 • Consequences on our IT system The Banking Commission decided to go further in the adoption of XBRL/XmL, for the following reasons :First, our present data system, BAFI, is a proprietary one, only used for the exchange of data between the French financial institutions and the Banking Commission/Bank of FranceBAFI is now a mature system (1993) which was due to evolve in the coming years (very complex legacy in mainframe technology : >1000 programs)Communication with many applications inside and outside and a much parameterised system (single window betwen financial institutions and BOF).XmL has become a standard in data transmission which imposes itself in the banking industry
9 2 • Consequences on our IT system In a first stage, need to run two parallel information systems : COFINREP and BAFIPossible since :Relatively few common data between the new reportings and the present data baseCOREP and FINREP are new and would have, in any case, needed important and complex developments in the old systemThis situation will not hinder the supervisors’ workHowever, we will need to run data exchanges between both systems
10 2 • Consequences on our IT systems BAFIFinancialInstitutionInformationSystemAccreditationInputOutputCivil statuts dataConfigurationPrudential and accounting ReportingInsideapplicationsCB/BDFBâle IISIGNECBCOREP InstancesDataControlandmanagementIFRSDataminingFINREP InstancesXBRLTaxonomy managementAccreditationCOFINREP
11 2 • Consequences on our IT system The second stage (after COFINREP) : we intend to move on with the rest of the reporting system and to have a single data exchange system with the financial institutions.In order to achieve this, we will have to :Create taxonomies regrouping all necessary data for supervisorsAdd the necessary functionnalities to the new systemDo the same thing with the other data managed by BAFI (statistics data, monetary data….).
12 3 • Challenge : managing complex taxonomies Banking Commission decided to create and manage in-house the French versions of COREP and FINREP taxonomiesCOREP: about 800 entities concernedFINREP: about 80 entities concernedFinal users : 280 supervisors and inspectorsTeam of 3 taxonomy managers (and 2 experts)
13 3 • Challenge : managing complex taxonomies French version of COREPproject considered too complex and too detailed30 templatesdata19 templates14000 datawith1100 data with a possible postponement 8300 data asked in standard approach and 6000 in IRBA approach
14 3 • Challenge : managing complex taxonomies French version of FINREPThe CP06, published in april 2005, considered too complex and too détailedThe final version of CEBS (12/2005) took care of these criticismsThe french version (06/2006) reduce even more the reporting39 templates(CEBS)2.400 data29 templates (France)1.500 datawith400 data (9 templates) yearly1100 data (20 templates) half yearly
15 3 • Challenge : managing complex taxonomies Creation of the French versions on the basis of the European taxonomiesAll the labels of concepts coming from the European taxonomies translated into FrenchCreation of a limited number of French specific concepts (with an English and French label)Internal validation of the taxonomies with the help of our tools (formalism and standards) and our supplier
16 3 • Challenge : managing complex taxonomies European taxonomies were available at the end of september for FINREP and on the 6th of october for COREP:French versions :FINREP => version for discussion (0.1) published on the Banque de France website on 26 october 2006- version january 2007- approved version 1.0 : 5 february 2007COREP => version for discussion (0.1) published on 1st december 2006
17 3 • Challenge : managing complex taxonomies French taxonomydefinitionsProfessional’sFeed backValidatedtaxonomiesLaunchTAXONMYTaxonomy editing tooldelivery, getting startedand trainingTaxonomy extensionsTaxonomy finalizationProject management and supervision02/2007First draftEuropeantaxonomies01/2006Final version europeanTaxonomies & Beginningof French taxonomies09/2006Taxonomiesavailable for theprofessional public10/2006
18 4. The Banking Commission COFINREP project SCOPEFrench taxonomies management (VERSIONING)Data reception managementElectronic signature of the instance documentsAuthorisations and reference data managementControls of received instancesReminders in case of anomalies or late data transmissionSynthesis and reporting according to the needs of the supervisorsInterface with the others systems of BDFAutomatisation of the processesPORTALV1La directive européenne = référence communetendance > séparation des orientations comptables et prudentiellesFINREP conduit par la BelgiqueDans cad III 3thématiques sont abordées : risques de marché, risque de crédit, risque opérationnel, même standardisation au niveau internationall ’ensemble des EC sera impactéLes superviseurs travaillent sur des normes de calcul et plus de cohérence entre normes comptables et prudentielles,Conception de 25 tableaux déclinés en 170 combinaisons différentesLe nombre de docts existant dans BAFI sera multiplié par 2 suite à CAD IIIIl sera pris en compte pour 1 établissement du fait qu ’il dispose d ’outils + / - fins pour la prise en compte de sa politique de risquePORTALV2
19 4. The Banking Commission COFINREP project Go livePortal V1Go livePortal V2LaunchValidationGlobalconceptionPORTALPortal V.1La directive européenne = référence communetendance > séparation des orientations comptables et prudentiellesFINREP conduit par la BelgiqueDans cad III 3thématiques sont abordées : risques de marché, risque de crédit, risque opérationnel, même standardisation au niveau internationall ’ensemble des EC sera impactéLes superviseurs travaillent sur des normes de calcul et plus de cohérence entre normes comptables et prudentielles,Conception de 25 tableaux déclinés en 170 combinaisons différentesLe nombre de docts existant dans BAFI sera multiplié par 2 suite à CAD IIIIl sera pris en compte pour 1 établissement du fait qu ’il dispose d ’outils + / - fins pour la prise en compte de sa politique de risquePortal V.206/200607/200606/200701/2008Project management and supervision
20 4. The Banking Commission COFINREP project Choice of a generic software :very short deadlinesuse XBRL as far as possibleLegal process for open tender :Open tender : 7 december 2005Emission of specifications : 3 february 2006Choice of solution : may 2006Chosen software meets 50% of users’ requirements in the basic version50% of specific developments taken in charge by the supplierSupplier team (5 to 10 people), internal IT team (4 to 6)
21 5 • COFINREP : technical choices - XBRL learning curve Main challenges :Dealing with very complex taxonomies, using dimensions extensively (new standard 1.0 created COREP)Lack of maturity of existing softwares, in particular taxonomy editors, not always compatibleTraining offer is still very limitedLack of formulae standard, which makes it compulsory to develop in-house business rulesThe question of “versioning” management is urgent and should be a priority for the months ahead
22 5 • COFINREP : technical choices - XBRL learning curve The added XML header: why?Electronic signature<fichier>< enveloppe><XBRL>+ To be able to sign multiple instances+ So that habilitation testing are not XBRL dependent+ For better « on the fly » performance on instance receptionAdded consistency testsNote: the XML schema of the header is available at:
23 5 • COFINREP : technical choices - XBRL learning curve The workflow of an instanceDefinition: an instance in COFINREP, is an XBRL instance limited to a single entity, a single taxonomy, single date and single money (iso421U7).Definition: The private taxonomy is an extension of our public taxonomy with added controls non compatible with all the existing tools, thus they cannot be shared. These « added » controls are described in the Excel files on the BDF website.
24 5 • COFINREP : technical choices - XBRL learning curve The workflow of an instanceDuring the day:1. Reception of files2. If signed, control of the signature and rights to sign3. Control of the header format (control that all the data is declared production OR simulation in a same file). Implicit XML well-formedness check.4. Check of the identity of the sender
25 5 • COFINREP : technical choices - XBRL learning curve The workflow of an instanceDuring the night, for every file that passed control 3 during the day:1. The files are broke down into XBRL instances with a xml header2. we take the latest file for each key (entity, date, taxonomy)3. Full validation of instance (public taxonomy) and added controls4. If no errors, validation with private taxonomy.5. The instance will then be used for: extraction to other application, transverse reports6. report to the financial agents on the status of the instances sent
26 5 • COFINREP : technical choices - XBRL learning curve Focus on: Control and storage of an instance#ContrôleProcess stopProductionSimulation1In case of a COREP instance, check that the value of the option in the header is properly set to « consolidated » or « social »yesX2XBRL 2.13Aggregations and dimensions4Calculation linksno5Uniqueness of key (entity, date, taxonomy) in instance6Coherence of entity between header and instanceExistence of entity in databaseManual verification7Coherence of date between header and instanceExistence of date in database8Coherence of taxonomy between header value and instane’s schemarefValidity of the taxonomy and the reported date9Coherence of currency between header value and instance declaration (iso4217 only)Validity of currency for the entity (database).10Is type COREP or FINREP expected for entityCOREP only: is entity authorized for the option declared in the header (consolidated, social)COREP only: is entity authorized for the approach value in the header, and the values present in the instance. (standard, foundation, advanced).COREP only: is the date of the reporting in the instance coherent with the entity’s status- Mars, June, September and December for large groups- June and December only for small groups
28 5 • COFINREP : technical choices - XBRL learning curve The test platform: a compatibility checkThe platform opened up in the beginning of March.Within one month we received 4 instancesInstances were mostly FINREPResult :3 instances: 100% public taxonomy valid. The last instance failed taxonomy validation, but was successful on the second emission3 out of 4 had no CL error, but only one succeeded the private taxonomy tests.
29 5 • COFINREP : technical choices - XBRL learning curve B. The performance testDone with over 800 instances.Instances with every fact combination filed. Not a “real life” scenario.Difficulty encountered: evaluate the target performance.
31 5 • COFINREP : technical choices - XBRL learning curve Virtual memory usage (On Java batches)In a possible future: switching from java 32 bits to java 64 bits (over 4G jvm).
32 5 • COFINREP : technical choices - XBRL learning curve Time consuming factors:Number of facts in the instanceTyped dimensionsExplicit dimension with many domain-members
33 5 • COFINREP : technical choices - XBRL learning curve C. Questions to answer before building your ITPrecision and decimals(9453 decimal= -3 )+ (9454 decimal= -3) + (9453 decimal= -3) = decimal=-3We imposed decimal=0 for monetary Items and decimal=4 for puresNeed for a tolerated variation in CL, more precise than the use of decimals (needed: )Units and scaleAlthough most existing system work with Kilo-Euros in the BDF, money scale is not part of the XBRL.We work with Euros, but will have to convert when exporting data to other existing application.
34 5 • COFINREP : technical choices - XBRL learning curve Missing/duplicate factsMissing facts can make certain Calculation Links to no be check (especially with total)Duplicated facts will interfere with calculation links, and possibly any control or restitution frameworkThis is why, it was decided that missing or duplicate fact were to be detected by COFINREP. The financial agents will be warned of these problems, and will be asked to correct this.Instance’s size impactLong item names, namespace ids, unit ids, dimension name….increase size of instancesIncrease processing time of an instanceFor example: replacing all ids/names in an instance by numbers => more than 60% size gain
35 5 • COFINREP : technical choices - XBRL learning curve Added control framworkThe need of:inter-instance controlscontrols with other data source (data bases, flat file…)conditional or complex controlsPeriodic controls (A test only done a particular month or frequency)Might require to build some configurable control mechanisms.Automated restitution: functional/technical barrier on data errorsNot everyone understands fact names, contexts, dimensions and hypercubes.We need to translate, for example, a Calculation error in way that an accounting personnel will easily understand.
36 5 • COFINREP : technical choices - XBRL learning curve XBRL instances and XML mapping toolsThe problem encounter with some XML mapping tools and XBRL instances is often due to the declaration of item:XBRL instance:Easier mapping format:Xsl transformation of XBRL instances is in study
37 5 • COFINREP : technical choices - XBRL learning curve D. Xades signature and XBRLFirst test with Xades signature and XBRL instances were conclusiveFound an incompatibility between XBRL and the c14n, exclusive version, not standard, algorithm. It does not keep silent namespaces.The final technical note will soon be available on the Banque de France websiteIn the upcoming weeks, the digital signature will be added to our test platform.
38 5 • COFINREP : technical choices - XBRL learning curve E. In a nearby future:We are trying to extend the use of XBRL in other applications:communication purposedata processing purposeAlso we follow the interest that major software companies have in XBRL: Oracle, Microsoft, Altova, Fermat…Ultimately , we communicate with the profession in hope that they will take the XBRL step, not just the export mapping/converter choice!
39 Secrétariat général de la Commission bancaire QUESTIONS ?SGCB