Playing several roles today

XBRL AND BANKING SUPERVISION

José María RoldánDirector General of Regulation, Banco de EspañaChair, XBRL EspañaChair, Committee of European Banking Supervisors (CEBS)

1ère Conférence XBRL France

17 janvier 2006

2Directorate General of Regulation, Banco de España

Playing several roles today

As Director General of Regulation of the Bank of Spain

As Chair of the Committee of European Banking Supervisors (CEBS)

As Chair of XBRL-Spain


The importance of XBRL

Efficient markets depend on information– A market is efficient if prices reflect all information on underlying

asset(s) But information is costly

– To generate, transmit and use XBRL promotes efficiency of information flows

– For both the generators and users of financial information– This, in turn, promotes greater efficiency and efffectiveness for the

system as a whole– Including through pricing that is based on more accurate and timely

information and therefore that better reflects underlying realities Public policy aspect of XBRL

– Accuracy– Reliability– Speed


CEBS

What is CEBS? A high-level committee of representatives from

the banking supervisory authorities and central banks of the European Union

What are its tasks? To advise the European Commission on banking

policy issues, in particular for the preparation of draft measures for the implementation of EU legislation

To foster consistent day to day implementation and application of Community legislation by issuing guidelines, recommendations and standards

To promote supervisory co-operation and provide for the exchange of supervisory information


CEBS and initiatives on reporting

Current situation: 25 countries asking for different information - different definitions; different IT systems; incompatible formats

CEBS has taken two main initiatives to promote common reporting requirements:1. Common reporting of the solvency ratio (COREP): final publication 13

January 20062. Common reporting for financial data (FINREP): final publication 16

December 2005

These initiatives take advantage of the fact that Basel II and IFRS will require all supervisors to change their reporting requirements

And XBRL provides the right technology at the exact moment it is needed most!

CEBS has decided in both initiatives to promote the use of XBRL with the development of two taxonomies.


Why?

Expected benefits:• Level playing field: common reporting framework

across the EU• Reducing administrative costs for banking groups

(mainly for cross-border banks)• Removal of potential obstacles to financial

market integration• Easier exchanges of information between

supervisors• Increased cost effectiveness of supervisory

activities in the EU• More flexible framework: across countries and

over time• Improving the quality of information flows from

reporting entities


Advantages of implementing XBRL in EU (I)

XBRL will enable banks to fulfil the reporting requirements of supervisory authorities across the EU with a single IT standard The costs of implementing EU common

reporting in cross-border groups will be reduced Less administrative and implementation costs

Small banks may benefit from a free standard like XBRL and from the economies of scale derived from the development of the XBRL taxonomy by CEBS Less implementation costs

Also, supervisors may benefit from economies of scale Increased cost effectiveness of supervisory

activities due the use of IT STANDARDS


Advantages of implementing XBRL in EU (II)

XBRL standard will facilitate the transmission of the common definitions expressed in common EU reporting Level playing field and removal of

obstacles for financial market integration In short, the compatibility of formats, contents and

IT systems supported by XBRL will allow supervisors to collect information on a decentralized way, while having all the functionalities as if a centralized data base were in place and benefiting from additional flexibility


European Law: Basel II implementation

Basel II

Directives 2000/12 & 93/6

Country 1

Auth. 1

Report 2Report 1

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Country 3Country 2 Country 25

Auth. 2 Auth. 3 Auth. 25

Report 25

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Report 3

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National Regulation

Transposition into national Legislation

European Law9X,XX% Basel II compatible

National Implementation

XBRL challenge!


XBRL Window of opportunity

Too early

Too late

Operational:Basel IIIFRS/IAS•••

Establishing:CEBSXBRL EU•••

20042003 2005 2006 20072002 2008

Today!


XBRL in Spain

Spain’s involvement Spain became an XBRL jurisdiction in 2004 XBRL España Association is chaired by Banco de España

(Central Bank and Banking Supervisory Authority of Spain). Public interest aspect of XBRL

Aim of XBRL España– To foster the introduction, adoption and development, both

at a national and international level, of the XBRL language, for the purpose of unifying the standards applicable to financial and business reporting

Ultimate goal: – Facilitate the integration of the Spanish & European

Financial Markets


Activities of XBRL-Spain

Quick increase in the number of members in XBRL Spain, up to 40

Cooperation between different regulatory agencies is one of the main targets

A number of XBRL taxonomies has been completed

XBRL has been implemented and now is in use There has been a strong collaboration with

other international taxonomies (i.e., COREP, IFRS-GP)


Projects of Bank of Spain

SIIF: receiving public financial statements in XBRL– So far, only the main groups are included in

this project– During 2006, the rest of the banking groups

will join the project– Banks may re-use the information to report

to other agencies (i.e. Securities Commission)



Spain COREP: receiving capital information based on new CRD (EU’s Basel II).– Leading the XBRL project since the

beginning.– Developing a national project during 2006,

in order to start receiving information in 2007

– Cross-border Spanish banks may report the same information to other supervisory agencies in EU



Spain FINREP: receiving supervisory reporting in XBRL– Implementing a harmonised financial

reporting framework in EU– Participating in the development of the

FINREP taxonomy– To be developed during 2007


Other XBRL projects in Spain

General Identification Data:– Setting a common taxonomy to identify the

reporting entity General Accounting Plan:

– To allow the reporting of non-financial companies according to local GAAP

Listed companies information:– Developed by the Spanish securities

commission


CONCLUSIONS

One of the strengths of XBRL is that it only needs a small critical mass

From the Spanish perspective, even just the Banco de España initiatives for banks’ reporting represent a huge step forward

But if we take all of the different initiatives together, e.g.– In Spain– In the EU (CEBS)– And more further afield (e.g. SEC initiatives)

We have a hugely potent tool

Template reporting is dead……Welcome to the era of tag reporting!


Thank you for your attention

Playing several roles today

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