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Evolution of COREP and FINREP
Presented at the:
IX European Banking SupervisorsXBRL Workshop & TutorialIn: ParisOn: 30th September 2008
By: Wolfgang StrohbachMember of CEBS XBRL Network
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Outline
1. CEBS???
2. FINREP vs. COREP
3. EU-wide reporting formats
4. Streamlining & Harmonization project
5. One-entry point
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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
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1. CEBS in the EU: our role
EBC¹EFCC¹
CEBS²CEIOPS3
CESR3
¹Finance ministries (FST also central banks)²Supervisors and Central Banks³Supervisors
Council European Commission
European Parliament
FSC¹
European Central Bank (ECB)
EFC-FST¹ Economic and MonetaryAffairs Committee (ECON)
Banking Supervision Committee (BSC)
Level-3 coordination
Advice/accountability coordination
Co-operation
IWCFC3
EBC European Banking CommitteeEFCC European Financial Conglomerates CommitteeEFC Economic and Financial CommitteeFSC Financial Services CommitteeFST Financial Stability TableIWCFC Interim Working Committee on Financial Conglomerates
Accountability
Inter-Institutional Monitoring Group
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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
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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
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2. COREP Basel II
ThreePillars
I – Capital requirements
II - Supervisory review process
III - Market discipline
Risk weightedassets
Definition ofcapital
Credit riskOperational
riskMarketrisks
Standardised Approach
InternalRatings-based
Approach
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3. Assessment Study (2007)COREP FINREP
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 commonality national discretions IFRS vs. National GAAP
Consequences
3 operational networks on reporting:
•FINREP network
•COREP network
•XBRL network
Harmonization & Streamlining project
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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 convergenceHarmonised but flexible
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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 implementationCall 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 approachesEGFI QueriesSeminars and workshops
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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)
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4. Timeline
2008 2009 2010 2011 2012
Reporting dates
COREP
FINREP*
Design phaseConsultation phaseDecision phaseTransposition phaseApplication phase
COREP
FINREP*
*FINREP dates are tentative and are influenced by other factors, as JEGR
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4. Graphically…
Reporting before… and after…
Supervisor 1
Supervisor 3
Supervisor 2
Different templates and definitions Common templates and definitionsSeveral formats Single formatDifferent technologies XBRL recommended
Supervisor 1
Supervisor 2
Supervisor 3
XBRL
Group A
Group B
Group C
Group A, B, CCommon
framework
XBRL
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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 Bank X
FSA A
FSA B
FSA C
Database
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Questions?
Thank you!
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