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COREP - FINREP - XBRLSGCB
COREP - FINREPImplementation in France : first
lessons
16th International XBRL Conference
Vancouver, 5 December 2007
Jean-Luc MENDADeputy Director, Policy and Research
Secrétariat général de la Commission bancaire
COREP - FINREP - XBRLSGCB
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COREP - FINREPImplementation in France : first lessons
1 • Project objectives : a european
framework
2 • The French Banking Commission
COREP - FINREP project
3 • First lessons… and the way forward
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1. Project objectives : a european framework
What are CEBS’ missions ?
• Advise the European Commission on banking policy issues, in particular for the preparation of draft measures for the implementation of EU legislation
• Foster consistent day to day implementation and application of Community legislation by issuing guidelines, recommendations and standards
• Promote supervisory cooperation and provide for the exchange of supervisory information
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• In 2005, CEBS decided to recommend the use of the XBRL standard in order to implement new common reportings, COREP and FINREP :
COREP (COmmon REPorting) : implementation of Basel 2 in the banking sector
FINREP (FINancial REPorting) : prudential reporting resulting from the implementation of IFRS standards
• Main objectives of CEBS :
– Harmonising banking supervision practices in Europe, end developing a common supervisory culture
– Reducing unnecessary costs of reporting to the banking supervisors through European convergence
1. Project objectives : a european framework
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• XBRL taxonomies built by the CEBS for COREP and FINREP create a common framework. They include :
– A common vocabulary for European supervisors, elaborated on the basis of official European regulations and
– A common « grammar » through its « Linkbases ».
• XBRL allows for a european flexible approach, including national specific elements
• XBRL standard has also allowed to implement complex reportings such as COREP and FINREP in a very tight time frame
1. Project objectives : a european framework
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COREP 13 january 2006 : COREP reporting framework released by CEBS =>
http://www.c-ebs.org/standards.htm
1st half 2006 : consultative period on the French framework with professional associations
28 juin 2006 : COREP provisions examined by the Commission bancaire.
FINREP 16 december 2005 : FINREP reporting framework released by CEBS
=> http://www.c-ebs.org/standards.htm
Start of the consultative period on the French framework with professional associations
28 june 2006 : Instruction n°2006-04 adopted by the Commission bancaire
1. Project objectives : a european framework
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COREP and FINREP taxonomies COREP => european taxonomy available on 20 september 2006
COREP => French first version fr discussion (0.1) published on 1st december 2006
- version 0.2 on 15 january 2007
- approved version 1.0 published on 5 february 2007
http://inbdf/fr/supervi/supervi_banc/reporting/corep.htm
FINREP => european taxonomy available on 6 october 2006
FINREP => French first version for discussion (0.1) published on 26 october 2006
- version 0.2 on 15 january 2007
- approved version 1.0 published on 5 february 2007
http://inbdf/fr/supervi/supervi_banc/reporting/finrep.htm
1. Project objectives : a european framework
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1. Project objectives : a european framework
Taxonomy editing tool delivery, getting started
and training
T
A
X
O
N
O
M
Y
First draftEuropean taxonomies 01/2006
Launch
Taxonomy extensions
Final version european Taxonomies & Beginning of French taxonomies09/2006
French taxonomy definitions Validated
taxonomies
Taxonomiesavailable for theprofessional public10/2006
02/2007
Project management and supervision
Taxonomy finalization
Professional’s Feed back
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2 • The French Banking Commission COREP - FINREP project
• 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 relationship 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 taxonomies
The financial institutions will transmit their reports (instance documents according to XBRL vocabulary) XML/XBRL, via the usual data transmission means
After verification of data quality, anomalies will be restituted to each institution
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2 • The French Banking Commission COREP - FINREP project
• In a first stage, need to run two parallel information systems : COFINREP and BAFI
• Possible since : Relatively few common data between the new reportings
and the present data base
COREP and FINREP are new and would have, in any case, needed important and complex developments in the old system
This situation will not hinder the supervisors’ work
• However, we will need to run data exchanges between both systems
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2 • The French Banking Commission COREP - FINREP project
FinancialInstitution
Information System
Prudential and accounting Reporting
Bâle II
IFRS
COREP Instances
FINREP Instances
SIGNECB
Insideapplications
CB/BDFAccreditation
Input Output
Civil statuts data
Configuration
Accreditation
DataControl
andmanagement
Datamining
XBRLTaxonomy management
BAFI
COFINREP
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2 • The French Banking Commission COREP - FINREP project
• Banking Commission decided to create and manage in-house the French versions of COREP and FINREP taxonomies
• COREP: about 800 entities concerned19 templates and about 23 000 data (facts)
• FINREP: about 100 entities concerned
42 tables (27 templates ) about 1 700 data
• Final users : 300 supervisors and inspectors
• Team of 4 taxonomy managers
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2 • The French Banking Commission COREP - FINREP project
SCOPE
– French taxonomies management (VERSIONING)
– Data reception management
– Digital signature of the instance documents
– Authorisations and reference data management
– Controls of received instances
– Reminders in case of anomalies or late data transmission
– Synthesis and reporting according to the needs of the supervisors
– Interface with the others systems of BDF
– Automatisation of the processes
PORTAL
V1 P
ORTAL
V2
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2 • The French Banking Commission COREP - FINREP project
Global conception
Launch
06/2006
Portal V.1
Project management and supervision
Validation
07/2006
Go livePortal V1
Go livePortal V2
P
O
R
T
A
L
Portal V.2
01/200806/2007
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2 • The French Banking Commission COREP - FINREP project
• Choice of a generic software :– very short deadlines– use XBRL as far as possible
• Legal process for open tender :– Open tender : 7 december 2005– Emission of specifications : 3 february 2006– Choice of solution : may 2006
• Chosen software meets 40% of users’ requirements in the basic version
• 60% of specific developments taken in charge by the supplier
• Supplier team (5 to 10 people), internal IT team (4 to 6)
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- Taxonomy published
- Intances workflow
- Taxonomy creation
- Instance management InstanceDocument
BACKEND
Taxonomy
Financials institutions (submitters)
Databasesservers
Corporate Directory Server: BAFI …
InstanceDocument
InstanceDocument
InstanceDocument
InstanceDocument
Receipt Management
Reception ManagementTaxonomies
INTRANETEXTRANET
Taxonomy control
TaxonomyMistakes/Errors
Taxonomy management Control and
storageAmounts ctrl.
BAFI/COFINREPComparision
Reporting synthesis
• Conception• Reporting
calculation
ReportingExtraction
COFINREPReportingErrors
Reporting synthesisReference data management
Habilitations
Taxonomy
InstanceDocument
2 • The French Banking Commission COREP - FINREP project
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3 • First lessons… and the way forward
FIRST OVERALL POSITIVE JUDGMENT
• In terms of project implementation :
– XBRL has allowed to realize the core functionalities within a very tight time frame (only one year including the development of the French versions of COREP and FINREP)
– Internet-based technology allows a more user friendly approach
• We started receiving end- June COREP and FINREP reports. Up to now, very encouraging elements :
– Over 80 % of required reports were sent before the deadline– Limited number of technical mistakes, most of them due to the
simultaneous implementation of digital signature, and tolerance on decimals
– No real problem with XBRL specifications, including dimensions
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3 • First lessons… and the way forward
MAIN CHALLENGES…(1)
• Dealing with very complex taxonomies, using dimensions extensively (new standard 1.0 created for COREP)
• Need to develop “best practices” for taxonomy development
• Too little softwares, in particular taxonomy editors, are fully compatible with all XBRL specifications, especially with dimensions 1.0
• Some taxonomy editors still lack user friendly approach to taxonomy validation
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3 • First lessons… and the way forward
MAIN CHALLENGES…(2)
• The question of “versioning” management is very important, and we welcome the upcoming issue of a new specification for discussion. Within the CEBS working group, Banque de France has contributed, with others, to this result.
• Beyond the identification of changes between different versions, we should be careful that modifications in taxonomies, for instance changes in namespaces, and resulting changes in element technical names, have only limited impact on existing mappings between internal systems and taxonomies. Otherwise, this could reveal cumbersome and costly.
• This is all the more important that COREP and FINREP (especially COREP) are very large and complex taxonomies. A major advantage of XBRL, which is to lower the cost of evolutions, could be hindered.
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3 • First lessons… and the way forward
MAIN CHALLENGES…(3)
• Lack of formulae standard has had a significant impact on the project, since it made it compulsory to develop a great number of in-house business rules.
• As a consequence, the choice of a software solution has revealed until now less of an advantage than should be the case. Indeed, we had to perform 60 % of specific developments, instead of 40 % as planned in the beginning
• But we are confident that with the finalization of the Formulae specification, this can be restored.
• Another consequence is that these specific business rules cannot be shared with credit institutions in order for them to perform the necessary internal controls.
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3 • First lessons… and the way forward
MORE CHALLENGES…(4)
• The Commission bancaire decided not only to receive data, using the XBRL standard, but also to store the data in XBRL files, and to manipulate the data with XBRL tools. We believe to be among the very few to have taken this orientation, instead of the more traditional approach consisting in storing the data in traditional databases.
• This is all the more challenging that existing tools have to be improved in order to benefit from one of XBRL advantage, that is to say less costly evolutions. We believe indeed that it is necessary to develop adapted tools, able to manipulate the data, keeping and using extensively the notion of “dimension”.
• We hope that software companies will respond to this important need in the future.
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3 • First lessons… and the way forward
THE WAY FORWARD
• COREP-FINREP is the decisive step in the rebuilding of Banque de France entire information system of data collection from financial institutions
• The second stage has just started with a new project concerning the modernization and automation of financial institution identity data
• Lastly we have just launched a new project to achieve the
complete change of our data collection system. The name of the project is SURFI in French, for Financial Institutions Unified Reporting System.
• In 2010, all data from financial institutions will be collected, using the XBRL standard.