short term has no future amsterdam, 6-7 november 2007 giancarlo pellizzari head of prudential policy...

Short Term Has No Future

Amsterdam, 6-7 November 2007

Giancarlo PellizzariHead of Prudential PolicyDexia Group

XBRL CEBS Workshop

22

1. Dexia and XBRL: a reminder

Agenda

2. FINREP: the first step to a Dexia “public” taxonomy

XBRL CEBS Workshop – Nov ‘07

- FINREP challenges- The FINREP Common Trunk (FINREP TC)- The link with our financial statements- The first step to a Dexia’s financial statements taxonomy

- Introduction- Dexia’s views on XBRL development- Organization and structure- Some words on COREP

3. Conclusions

33

Introduction : What is Dexia?

Dexia and XBRL : a reminder


Dexia Holding: 23,2 EURBn Capitalization, world leader in public financing– Dexia Bank Belgium– Dexia Crédit Local (France)– Dexia BIL (Luxembourg)

– FSA (Financial Security Assurance) – USA – Credit enhancement– Dexia Insurance Belgium– Deniz Bank (6th largest private bank in Turkey)– Factoring, leasing, real estate, IT, etc.

A group of 241 entities, 33.321 staff members and present in 33 countries

44

Introduction : What is Dexia?



55

Organization and structure: the regulatory environment



Home – host supervisors:Home supervisors (working in a college)

– CBFA – Belgian Banking, Finance and Insurance Commission (as lead supervisor)– The French Commission Bancaire– Commission de Surveillance du Secteur Financier (Luxembourg) - CSSF

Host supervisors– EU supervisors

• Bundesbank – Bafin (Germany)• Banca d’Italia (Italy)• Banco d’Espana (Spain)• Etc.

– Other countries• BRSA (Turkey)• SEC (USA)• OFSI (Canada)• Japan FSA• Singapore• Etc.

66

Organization and structure: the regulatory environment



COREP and FINREP reporting:COREP

– 23 COREP to deliver to 12 different regulators

– 7 other Basel II reporting to other 7 regulators

– Of which:• 4 regulators requiring XBRL• 3 using XBRL as an option

FINREP– 13 FINREP to deliver to 8 different regulators

– Of which:• 4 regulators requiring XBRL• 3 using XBRL as an option

77

Organization and structure: infrastructure



BE

LUFR

SAPHolding

MAGNITUDECOMMON PARAM

SPEC. LOCAL PARAMDBB

DCL

DBL

STATUTORY CONSOLIDATED

CONSODHLD

CONSODBB

CONSODCL

CONSODBL

VISUALSCOPE

MIS CONSOESSBASE

CHECK CHECK

INTERNAL REPORTING

EXTERNAL REPORTING

88

Organization and structure: infrastructure



Accounting systems

Managementsystems

Booking entityX

Files DMV3

INPUT datas

Detailedresults

FERMAT

RWA calculation

engine

Regulatoryreporting

AggregatedresultsMarketrisks

Aggregated results

Credit risks

Aggregatedresults

Operationalrisks

Data’sEquity

COREPforms

FINREPforms

Aggergated results

Accounting

MAGNITUDE

Market riskOperational

RiskFERMAT J-Port

99

Dexia’s views on XBRL development



• Use XBRL as a tool for more harmonization, flexibility and gain of time both vertically and horizontally

• We thus need:– XBRL at the beginning of the reporting processes (public, COREP, FINREP

and internal)

– Softwares that read XBRL

– One integrated database (kind of Group taxonomy)

• “One fits all”• This is more efficient if XBRL used by “non-regulators” (Tax in

Netherlands, AML in Spain, Ministry of Finance in Belgium, Central balance sheet offices, etc.)

1010

Some words on COREP



• The main issue in COREP is the “risk gathering”, i.e. COREP is build using information from different departments working in different ways (FINREP is “easier” on this because produced by only one department):– Accounting, Operational risk and market risk decentralized on a centralized

system

– Credit risk centralized on a centralized system

– Other banks may have other structures (but this is often the one chosen for cross-border groups)

• This combined with the “national discretions” for COREP implementation makes it a nightmare

1111

Some words on COREP



Etc.Finrrep xbrl

Etc. Etc.

Exel template Finrep Xbrl taxonomy Finrep

Creating Excel

Construction XBRL and validation

Excel templateBelgian Corep

Xbrl taxonomyBelgian Corep

XBRLCorep

Feed manuel corrections(automatic)

UBMatrix/ReportBuilder (XBreeze)

OracleInput via scripts

Operationalsystems

ETL

BO universe

XBRL database

1212

FINREP challenges

FINREP: the first step to a Dexia “public” taxonomy


• Link with IFRS and banks’ financial statements• National discretions:

– CEBS guidelines not always clear– CEBS guidelines not always respected by member states– Changes in the “business format” may have insidious impact on the taxonomy (deleting a line changes the

definition of the total – unless “among which”)– Additional information inconsistent with the CEBS format– Sometimes, regulators may give interpretations to IFRS rules

• Dimensions:– Preferred instead of tuples (link with IASCF?)– More standardization may be a benefit (exhaustive list of flows used throughout FINREP)– Definitions of some dimensions (counterparties => links with COREP, ECB, etc.)

• Translations may add confusion (or precision) • Better definition of the concepts for the IASCF but not only (equity detail)

1313

The FINREP CT: the principle


“The same information should be produced only once”

as such, certain elements have been defined as common i.e. :

– Elements requested by the 3 mains regulators (CB, CBFA, CSSF)

– Elements requested by the holding (in the consolidated financial statements)


1414

The FINREP CT: practical issues


• Counterparties


1515

The FINREP CT: examples


• CEBS’ B/S


• CB’ B/S

1616



• CSSF’ B/S


1717



• CBFA’ B/S


1818



• Dexia’ B/S


1919



• Dexia’ B/S: links with Magnitude’s chart of account


2020

Links with our financial statements



• According to the principles applied to FINREP, we have to map FINREP tables to the financial statements. It implies that:– Interpretations used for financial statements and mapping from financial

statements to magnitude accounts have to be applied for FINREP

– The detail in the financial statements have to be reproduced in FINREP

– Analysis of the financial statements will be mapped to the FINREP tables

2121




• Example 1: link from F/S to FINREP

2222




• Example 2: additional detail

2323

The first step to a first Dexia’s financial statements taxonomy



• Taxonomies– IASCF– FINREP – CBFA– CB– CSSF

• Dexia ?– For financial statements– For FINREP– What would be the link with COREP taxonomy (if one could exist?)– For tax purposes ?– Others ?

2424

Conclusions

Conclusions


• Dexia has developed strong links between FINREP and its published financial statements. This will help for the Pillar 3 publication.

• From recent CEBS’ Public Hearing on supervisory reporting:– Long term: CEBS intention to have harmonized reporting for 2011

– Short term:• Issues : differences in procedure, definitions, national implementation and IT• Solutions:

– Group-wide basis

– Home-host perspective

– Where it is relevant

– Case by case basis.

• “Promote” FINREP outside Europe (Morocco, Croatia and others)

short term has no future amsterdam, 6-7 november 2007 giancarlo pellizzari head of prudential policy...

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