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COREP - FINREP - XBRLSGCB
COREP - FINREP - XBRLThe French Banking Commission
approach
15th International XBRL Conference
Munich, 6 June 2007
Jean-Luc MENDADeputy Director, Policy and Research
Secrétariat général de la Commission bancaire
COREP - FINREP - XBRLSGCB
2
COREP - FINREP - XBRLSGCB
COREP- FINREP- XBRLThe French Banking Commission approach
1 • Project objectives : a european framework
2 • Consequences on our IT system
3 • Challenge : managing complex taxonomies
4 • The French Banking Commission COFINREP
project
5 • COFINREP : technical choices - XBRL learning
curve
3
COREP - FINREP - XBRLSGCB
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 culture
– Reducing unnecessary costs of reporting to the banking supervisors through European convergence
• In order to fulfill this goal, need for :
– The definition of a common framework
– A common vocabulary based on the European legislation
– A degree of flexibility in order to adapt to national specifics.
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COREP - FINREP - XBRLSGCB
• Two european initiatives :
– A common reporting for a common solvency ratio (COREP – COmmon REPorting)
CRD Directives 14 June 2006: final adoption of Directives 2006/48/CE et
2006/49/CE
COREP 13 January 2006: CEBS publishes COREP templates =>
http://www.c-ebs.org/standards.htm Adoption of the French COREP project by the Banking
Commission 26 March 2007
1. Project objectives : a european framework
5
COREP - FINREP - XBRLSGCB
– A common « supervisory financial » reporting for banks consolidated accounts in IFRS (FINREP, FINancial REPorting)
European regulation introducing IFRS is directly applicable in Europe
European reporting published by the CEBS on 16 December 2005 => http://www.c-ebs.org/standards.htm
Adoption of the French FINREP project by the Banking Commission on 28 June 2006
1st remittance date for COREP and FINREP 30 June 2007 in France
1. Project objectives : a european framework
6
COREP - FINREP - XBRLSGCB
• 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
• But XBRL standard must also keep pace with the evolution of business requirements, and the complexity of COREP and FINREP reportings.
1. Project objectives : a european framework
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COREP - FINREP - XBRLSGCB
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 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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COREP - FINREP - XBRLSGCB
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 France
BAFI 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
XmL has become a standard in data transmission which imposes itself in the banking industry
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COREP - FINREP - XBRLSGCB
2 • Consequences on our IT system
• 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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COREP - FINREP - XBRLSGCB
2 • Consequences on our IT systems
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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COREP - FINREP - XBRLSGCB
2 • Consequences on our IT system
• The second stage : 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 supervisors
– Add the necessary functionnalities to the new system
– Do the same thing with the other data managed by BAFI (statistics data, monetary data….).
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COREP - FINREP - XBRLSGCB
3 • Challenge : managing complex taxonomies
• 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 80 entities concerned
42 tables (27 templates ) about 1 700 data
• Final users : 280 supervisors and inspectors
• Team of 4 taxonomy managers
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COREP - FINREP - XBRLSGCB
3 • Challenge : managing complex taxonomies
• Creation of the French versions on the basis of the European taxonomies
• All the labels of concepts coming from the European taxonomies translated into French
• Creation 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)
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COREP - FINREP - XBRLSGCB
3 • Challenge : managing complex taxonomies
COREP and FINREP taxonomies were available at the end of september :
FINREP => end-september 2006
http://www.finrep.info
COREP => 6 october 2006
http://www.corep.info
R
h
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COREP - FINREP - XBRLSGCB
French versions of COREP and FINREP :
FINREP => version for discussion (0.1) published on the Banque de France website on 26 october 2006
- version 0.2 15 january 2007
- approved version 1.0 : 5 february 2007
http://inbdf/fr/supervi/supervi_banc/reporting/finrep.htm
COREP => version for discussion (0.1) published on 1st december 2006
- version 0.2 15 january 2007
- approved version 1.0 : 5 february 2007
http://inbdf/fr/supervi/supervi_banc/reporting/corep.htm
3 • Challenge : managing complex taxonomies
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COREP - FINREP - XBRLSGCB
3 • Challenge : managing complex taxonomies
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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COREP - FINREP - XBRLSGCB
4. The Banking Commission COFINREP projectSCOPE
– 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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COREP - FINREP - XBRLSGCB
4. The Banking Commission COFINREP 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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COREP - FINREP - XBRLSGCB
4. The Banking Commission COFINREP 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 60% of users’ requirements in the basic version
• 40% 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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COREP - FINREP - XBRLSGCB
4. The Banking Commission COFINREP projectMain challenges
• Dealing with very complex taxonomies, using dimensions extensively (new standard 1.0 created for COREP)
• Lack of maturity of existing softwares, in particular taxonomy editors, not always compatible
• Training offer is still very limited
• Lack of formulae standard, which makes it compulsory to develop in-house business rules
• The question of “versioning” management is urgent and should be a priority for the months ahead
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COREP - FINREP - XBRLSGCB
The added XML header: why?
Electronic signature
<fichier>
< enveloppe>
<XBRL> <XBRL> <XBRL>
< enveloppe> < enveloppe>
+ To be able to sign multiple instances
+ So that habilitation testing are not XBRL dependent
+ For better « on the fly » performance on instance reception
- Added consistency tests Note: the XML schema of the header is available at:
http://www.banque-france.fr/fr/supervi/supervi_banc/reporting/reporting.htm
5 • COFINREP : technical choices - XBRL learning curve
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COREP - FINREP - XBRLSGCB
5 • COFINREP : technical choices - XBRL learning curve
# Contrôle Process stop Production Simulation
1In case of a COREP instance, check that the value of the option in the header is properly set to « consolidated » or « social » yes X X
2 XBRL 2.1 yes X X
3 Aggregations and dimensions yes X X
4 Calculation links no X X
5 Uniqueness of key (entity, date, taxonomy) in instance yes X X
6
Coherence of entity between header and instance yes X X
Existence of entity in database Manual verification X X
7
Coherence of date between header and instance
yes X Existence of date in database
8
Coherence of taxonomy between header value and instane’s schemaref yes X X
Validity of the taxonomy and the reported date yes X X
9
Coherence of currency between header value and instance declaration (iso4217 only) yes X
Validity of currency for the entity (database). yes X
10
Is type COREP or FINREP expected for entity
Manual verification X COREP 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).
Manual verification X
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
Focus on: Control and storage of an instance
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COREP - FINREP - XBRLSGCB
- 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
5 • COFINREP : technical choices - XBRL learning curve
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COREP - FINREP - XBRLSGCB
5 • COFINREP : technical choices - XBRL learning curve
A. The test platform: a compatibility check
The platform opened up in the beginning of March.
• Within one month we received 4 instances
• Instances were mostly FINREP
Result :
• 3 instances: 100% public taxonomy valid. The last instance failed taxonomy validation, but was successful on the second emission
• 3 out of 4 had no CL error, but only one succeeded the private taxonomy tests.
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COREP - FINREP - XBRLSGCB
5 • COFINREP : technical choices - XBRL learning curve
B. The performance test
2 0
185
79
5
123
0
20
40
60
80
100
120
140
160
180
200
Step 1 Step 2 Publique taxonom yvalidation
Private taxonom yvalidation
CL logs pars ing Inter-ins tance validation(COREP)
Corep
Finrep
Total
Processing times (minutes)
• Done with over 800 instances.
• Instances with every fact combination filed. Not a “real life” scenario.
• Difficulty encountered: evaluate the target performance.
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COREP - FINREP - XBRLSGCB
5 • COFINREP : technical choices - XBRL learning curve
C. Questions to answer before building your IT
• Precision and decimals
(9453 decimal= -3 )+ (9454 decimal= -3) + (9453 decimal= -3) = 27 023 decimal=-3
We imposed decimal=0 for monetary Items and decimal=4 for pures
Need for a tolerated variation in CL, more precise than the use of decimals (needed: +- 3000)
• Units and scale
Although 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.
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COREP - FINREP - XBRLSGCB
5 • COFINREP : technical choices - XBRL learning curve
• Missing/duplicate facts
Missing 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 framework
This 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 impact
Long item names, namespace ids, unit ids, dimension name….
increase size of instances
Increase processing time of an instance
For example: replacing all ids/names in an instance by numbers => more than 60% size gain
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COREP - FINREP - XBRLSGCB
5 • COFINREP : technical choices - XBRL learning curve
• Added control framework
The need of:
- inter-instance controls
- controls with other data source (data bases, flat file…)
- conditional or complex controls
- Periodic 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 errors
Not everyone understands fact names, contexts, dimensions and hypercubes.
We need to translate, for example, a Calculation error in a way that an accounting personnel will easily understand.
COREP - FINREP - XBRLSGCB
QUESTIONS ?
Secrétariat général de la Commission bancaire
SGCB