European Banking Supervision: COREP and FINREP Taxonomies Roadmap

European Banking Supervision: COREP and FINREP Taxonomies Roadmap

Ignacio Boixo , CEBSKatrin Schmehl, Deutsche Bundesbank

24th June 2009

Collaborative Tasks in Collaborative Tasks in DetailDetail

Business Experts Track

Identification of the measuresIdentification of common elements


Identification of the measuresIdentification of common elements Taxonomy Development Track

Normalisation of the templates

Taxonomy Development Track


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



Definition of the

•data types•Instant or duration•Debit or credit•Common labels

European Financial European Financial StabilityStabilityhttp://ec.europa.eu/internal_market/finances/docs/committees/supervision/communication_may2009/C-2009_715_en.pdf

European financial European financial supervisionsupervision

Collect micro-prudential Collect micro-prudential informationinformation• 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

European Supervisory European Supervisory Authorities 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.

European System of Financial European System of Financial SupervisorsSupervisorsThree European Supervisory Authorities1. European Banking Authority (EBA)2. European Insurance and Occupational

Pensions Authority (EIOPA)3. European Securities Authority (ESA)

Appropriate national supervisory authorities

Cross-sectoral cooperation, in addressing cross-sectoral challenges, including financial conglomerates

European Council agreed on June European Council agreed on June 1818

Run is already started!



Definition of validation rulesPreparation of meaningful test cases


Definition of validation rulesPreparation of meaningful test cases Taxonomy Development Track

Creation of schema matrixes




Quality insurance by peer-2-peer reviewand business review


Quality insurance by peer-2-peer reviewand business review


Definition of design principles for the FINREP taxonomy





Creation of a draft FINREP taxonomy


Creation of a draft FINREP taxonomy


Reverse engineering into schema matrix by an application and alignment check

with agreed schema matrix


Reverse engineering into schema matrix by an application and alignment check

with agreed schema matrix


Public review period


Public review period


Preparation of test cases



Further TasksFurther TasksTaxonomy Development Track

Definition of design principles on formulas


Definition of design principles on formulas


Creation of the European formula linkbase


Creation of the European formula linkbase


Creation of documentation on taxonomy architecture


Creation of documentation on taxonomy architecture

Identification of the measures and dimensions





measures

measures

dimension

dimension

comm

on elements

comm

on elements

Makes FINREP understandable for IT purposes !Makes FINREP understandable for IT purposes !






dimension

dimension

dimension

dimension

measuresmeasures

No impact on changes in the presentation !No impact on changes in the presentation !

Identification of IFRS elements





FINREPFINREP IFRSIFRS

The amount of fitting elements could be relatively small.

Creation of schema matrixesTaxonomy Development Track




EXCEL viewEXCEL view XBRL viewXBRL view

What the supervisors ask for! What is being defined by IT!

Creation of schema matrixesTaxonomy Development Track




EXCEL viewEXCEL view XBRL viewXBRL view

Schema matrix viewSchema matrix view

Design principlesTaxonomy Development Track



Definition of design principles for the FINREP taxonomyOne schema for the primaries

One schema per dimension

..dimension

.XSD

commonprimaries

.XSD

template.XSD

imports




Definition of design principles for the FINREP taxonomyComprehensive Error Messages

XBRL dimensional error messages aren’t 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.





When the element name is not comprehensive,

why not using a codification?

p-sd:ConversionFactorAppliedp-sd:ConversionFactorApplied

p-sd:p122365p-sd:p122365

Advantages:

+ Easier to read by technical staff+ Size of the instance is considerably smaller+ More stability

Advantages:

+ Easier to read by technical staff+ Size of the instance is considerably smaller+ More stability





<p-sd:p122365>150.00</p-sd:p122365><p-sd:p122365>150.00</p-sd:p122365>

Solution:

+ Usage of formula linkbase+ Assignment of an error description+ Definition of error description in national languages

Solution:

+ Usage of formula linkbase+ Assignment of an error description+ Definition of error description in national languages

ConversionFactorAppliedConversionFactorApplied

Possible validation result:

The value of should be

smaller than 100.00 but the reported value is .

ConversionFactorAppliedConversionFactorApplied

150.00150.00

Taxonomy:Instance:




Definition of design principles for the FINREP taxonomyHow to modularise the European taxonomy

Defined by using the Definition

LinkbaseDefined by using the Definition

LinkbaseXBRL dimensional error messages aren’t comprehensive.XBRL dimensional error messages aren’t comprehensive.

Possible validation result:

The following check is not valid:

“p122365 | s1 | c1” : ConversionFactorAppliedConversionFactorApplied Scope of ConsolidationScope of Consolidation CRDCRD

Defined by using the Formula Linkbase

Defined by using the Formula Linkbase

||





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

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

Test cases and examplesTaxonomy Development Track




+ Creation of XBRL formulas on basis of Excel formulas defined in the spreadsheets

+ Creation of sample test cases based on the provided numbers

+ Creation of XBRL formulas on basis of Excel formulas defined in the spreadsheets

+ Creation of sample test cases based on the provided numbers

Modularisation

How changes were adapted to the national needs?

Largereport

Largereport

Medium report

Medium report

SmallreportSmallreport

Customreport

FINREP superset of reports

FINREP superset of reports

Expected:Expected:

Customreport

Realised:Realised:

Medium report

Medium report

SmallreportSmallreport

Customreport

Customreport

Current situation !Current situation !

Modularisation

How changes will be adapted to the national needs?

Situation in the future!Situation in the future!

Definition

LinkbaseDefinition

Linkbase

Formula LinkbaseFormula LinkbaseCEBS

taxonomy

.XSD

CEBStaxonom

y.XSD

Label Linkbase(s)Label Linkbase(s)

Presentation

LinkbasePresentation

Linkbase

European Approach

Definition

LinkbaseDefinition

Linkbase


taxonomy

.XSD

CEBStaxonom

y.XSD


Presentation


Linkbase

National Approach

Nationaltaxonom

y.XSD

Nationaltaxonom

y.XSD

Formula LinkbaseFormula Linkbase


Presentation


Linkbase

No changes on concepts !

Only additional linkbases !

No changes on concepts !

Only additional linkbases !

Best Practices

+ Harmonisation efforts on basis of the XBRL instances+ Harmonisation efforts on basis of the XBRL instances

Deliverables

What is going to be provided?

Definition

LinkbaseDefinition

Linkbase


taxonomy

.XSD

CEBStaxonom

y.XSD


Presentation


Linkbase

European Approach

Schema matrixes

Headertaxonom

y.XSD

Headertaxonom

y.XSD

Label

LinkbaseLabel

LinkbaseTest cases

Taxonomy ArchitectureDocumentation

FormulaDocumentation

+

+

+

European Banking Supervision: COREP and FINREP Taxonomies Roadmap

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