1 Evolution of COREP and FINREP Presented at the: IX European Banking Supervisors XBRL Workshop & Tutorial In: Paris On: 30th September 2008 By: Wolfgang Strohbach Member of CEBS XBRL Network

2 Outline 1.CEBS??? 2.FINREP vs. COREP 3.EU-wide reporting formats 4.Streamlining & Harmonization project 5.One-entry point

3 Policy and implementation measures Legislation Level 1: The Commission European Parliament Council Level 2: European Banking Committee Convergence and supervisory cooperation 1. CEBS in the Lamfalussy process: 3 levels Level 3: CEBS

4 1. CEBS in the EU: our role EBC¹ EFCC¹ CEBS² CEIOPS 3 CESR 3 ¹Finance ministries (FST also central banks) ²Supervisors and Central Banks ³Supervisors Council European Commission European Parliament FSC¹ European Central Bank (ECB) EFC- FST¹ Economic and Monetary Affairs Committee (ECON) Banking Supervision Committee (BSC) Level-3 coordination Advice/accountability coordination Co-operation IWCFC 3 EBC European Banking Committee EFCC European Financial Conglomerates Committee EFC Economic and Financial Committee FSC Financial Services Committee FST Financial Stability Table IWCFC Interim Working Committee on Financial Conglomerates Accountability Inter-Institutional Monitoring Group

5 2. FINREP (Financial Reporting) What is: consolidated financial information collected by national supervisors and based on endorsed IFRSs. First released: December 2006 Objective: Increase comparability of financial information delivered by banks to supervisors (convergence) Structure: –core information –non-core information –additional quantitative and qualitative information (national discretion) Implementation in EU: –21 countries –mainly core information

6 2. COREP (Common Reporting) What is: Solo and consolidated prudential information collected by national supervisors and based on CRD (Basel II) Objective: develop a common language for communication in the context of a common European framework (convergence) First released: January 2006 Structure: –core information (homogen) –standardised supplemental information (flexible) Implementation in EU: –27 countries –2/3 of content

7 2. COREP Basel II Three Pillars I – Capital requirements Risk weighted assets Credit risk Standardised Approach Internal Ratings-based Approach Operational risk Market risks Definition of capital II - Supervisory review process III - Market discipline

8 3. Assessment Study (2007) COREPFINREP Outcome of assessment study Significant level of commonality, high in core templates More burdensome than US Basel II reports. High commonality in core templates Low use of non-core templates Sources for the exercise Commonality of data User-test Commonality of data User-test Analysis public Financial St. Reasons for low commonalitynational discretionsIFRS vs. National GAAP Consequences 3 operational networks on reporting: FINREP network COREP network XBRL network Harmonization & Streamlining project

9 3. EU-wide reporting format move towards EU-wide reporting formats so as to have a single set of data requirements and reporting dates. (ECOFIN conclusions) FINREP COREP EU-wide reporting formats Hard convergence Harmonised but flexible

10 3. Hard convergence Scope: IAS/IFRS: consolidated and sub-consolidated reports (FINREP) Pillar 1: consolidated, sub-consolidated and solo reports (COREP) Hard convergence on data definitions: Use of different accounting frameworks (IFRS vs. National GAAP) Different CRD implementation Call for Advice on National Discretions (advise by CEBS to EU Com) Implementation Questions (publication on CEBS website) CRD Transposition Questions (EU Commission) Differences in supervisory approaches EGFI Queries Seminars and workshops

11 4. Streamlining project Maximum data model: so as no additional data requirements on financial reporting and Pillar 1 will be imposed Based on need-to-know basis for supervisory purposes: the ongoing user-test on FINREP and COREP will determine the use and the relevance of the data requirements Seminars and workshops on the use on FINREP and COREP data will provide detailed information Data models structured in two layers: core and non-core Core: data required by all supervisory authorities Non-core: adapted to national needs, either for domestic-operating or entities included in cross-border groups (for the latter, the banks will build the data model by aggregations of national data models or by decision within a college of supervisors)

12 4. Timeline Reporting dates COREP FINREP* Design phase Consultation phase Decision phase Transposition phase Application phase COREP FINREP* *FINREP dates are tentative and are influenced by other factors, as JEGR

13 4. Graphically… Reporting before… and after… Supervisor 1 Supervisor 3 Supervisor 2 Different templates and definitions Common templates and definitions Several formatsSingle format Different technologiesXBRL recommended Supervisor 1 Supervisor 2 Supervisor 3 XBRL Group A Group B Group C Group A, B, C Common framework XBRL

14 5. Analysis of simplified reporting procedures Decentralised model vs. one entry point approach Analysis of costs and benefits for cross-border groups and national authorities Analysis of pre-requisites for one entry point approach FSA A FSA B FSA C Bank X FSA A FSA B FSA C Database

15 Questions? Thank you! 15

Contacts: CEBS Wolfgang Strohbach: