1 Leveraging XBRL in the Banking Industry Internationally Ignacio Boixo – Bank of Spain Luc Dufresne – National Bank of Belgium Yoshiaki Wada - Bank of Japan Jon Wisnieski – FDIC 18 th International XBRL Conference

2 Leveraging XBRL in the Banking Industry Internationally European Banking Supervision Ignacio Boixo – XBRL Network Committee of European Banking Supervisors

Why Financial Information is necessary? Savings accounts Information Intermediaries Business Firms Flow of capital Flow of information  $ Financial Intermediaries Regulators of capital markets and financial institutions Auditors and Accounting regulators Financial and information flows in a capital market economy. Paul Healy & Krishna Palepu, Information Asymmetry, Corporate Disclosure and the Capital Markets: A Review of the Empirical Disclosure Literature

Who is Who in European Banking Supervision Policy and implementation measures Legislation Level 1: The Commission European Parliament Council Level 2: European Banking Committee Convergence and supervisory cooperation Level 3: C ommittee of E uropean B anking S upervisors 27 Countries

European Banking Supervision. Vision  “While national supervisory authorities are free to decide on the technical transmission specifications to implement the reporting framework, CEBS considers that XBRL can be a helpful tool in constructing a harmonised European reporting mechanism.  CEBS will therefore develop an XBRL platform and make it available free of charge to national authorities and supervised institutions. XBRL taxonomies will be developed for both the COREP (COmmon REPorting - Basel II-) and FINREP (FINancial REPorting -IFRS-) frameworks.” Point 4, Cover Note to the Framework for Common Reporting of the New Solvency Ratio

Stack of Interoperability Layers AgreementsParliament and Int’l Bodies Business GuidelinesBanking Supervisors Data descriptionCEBS COREP&FINEP Networks TaxonomiesCEBS XBRL Network Information Tech. Best PracticesBest Practices Board FormatXBRL Standards Board Comm. & Security W3C, ISO…

Interoperability reduces regulatory burden  Reporting before… and after… Supervisor 1 Supervisor 3 Supervisor 2 Different templates and definitions Common templates and definitions Several formatsSingle format Different technologiesXBRL recommended Supervisor 1 Supervisor 2 Supervisor 3 XBRL Group A Group B Group C Group A, B, C Common framework XBRL

Multiple incompatible Flows Bank. A FSA B Bank C Bank X Secu A Insu C Signature Format Signature Format Signature Format Signature Format Signature Format Internal System Bank. A FSA B Bank C Secu A Insu C

Man in the middle: Central Data Base Bank X Secu A Insu C Signature Format Signature Format Signature Format Bank A FSA B Bank C Bank A FSA B Bank C Signature Format Internal System Bank. A FSA B Bank C Secu A Insu C TARGET2 (Real Time Gross Settlement) Format, Signature and Mail by SWIFT

Man in the middle: Full Centralization Bank X Signature Format Signature Format Internal System Secu A Bank A FSA B Bank C Insu C Secu A Bank A FSA B Bank C Insu C Bank. A FSA B Bank C Secu A Insu C TARGET2 Securities (Straight Thru Processing) Format, Signature and Mail by SWIFT

Standards in Motion: Go live! IFRS & Basel II in EU Banking Supervision period Bank A FSA B Bank C Bank X Secu A Insu C Signature Format Signature Signature Format Signature Signature Format Internal System Bank. A FSA B Bank C Secu A Insu C XBRL Format National Definitions National Extensions National Practices

Standards in Motion: Interoperability Secu A Bank A FSA B Bank C Insu C Bank X Internal System Bank. A FSA B Bank C Secu A Insu C Web 2.0 IFRS & Basel II in European Supervision Long term vision Signature Format Euro Test Site Signature Format XBRL

Uniformed Supervisory Definitions Single Set of European Taxonomies Taxonomy acknowledgement Standards & Best Practices in all the layers Decimals, Rounding, Identification… Format, Security, …. XBRL reference validator Key Developments

14 18 th International XBRL Conference Ignacio Boixo XBRL Network Committee of European Banking Supervisors Thank you for your attention

15 Leveraging XBRL in the Banking Industry Internationally Luc Dufresne - Head of Microeconomic information Department - National Bank of Belgium 18 th International XBRL Conference

Agenda  XBRL in Belgium  The XBRL project of the CBSO  Coordinating initiatives

XBRL Belgium  Non-profit institution founded on 22 November 2004 and became an established jurisdiction in 2006  Hosted by the National Bank of Belgium  Founding members are regulators, public services, accounting and banking bodies

Actual developments in Belgium  Running as of today  XBRL regulatory bank reporting in Belgium  FINREP and COREP projects  The CBSO project  Collect of annual accounts  In progress  Federal Public Service Finance  Corporate tax return  Directorate-general Statistics and Economic Information  Structural business survey

Legal context of the CBSO project  Gathering and spread  The Central Balance Sheet Office collects annually annual accounts from companies and publishes the annual accounts as PDF files  Statistical mission  Data from standardized annual accounts are handled to produce accurate data for official bodies (National accounts)  Publication of statistics per activity sector

 First phase - Input flow  Gathering annual accounts in XBRL as from April 2007  Increase the quality of annual accounts received  Second phase - Output flow  Availability of XBRL files for the users  Harmonizing the input and output format Phases of the project

Evaluation of phase 1 - Figures Annual accounts – Filing medium % Floppy Internet (forecast) Internet (actual) Paper

22 Second phase - Users and Needs  Users  Regulators ( Tax office, Commercial courts)  Statisticians ( National accounts, Business survey)  Bank sector ( credit risk)  Data analysts  Needs  Format and publication speed (Banking sector for credit scoring)  Direct availability of XBRL files (Data providers, Regulators)

Output availability FiguresImagesXBRL Since Format Text filePDFXBRL Information Only quantitative data Full Elapsed time 1 => 3 weeks3 days Data processing YNY Exhaustiveness YY Not for accounts filed on paper

XBRL broadening  To broaden the area of XBRL at national level  Through collaboration with other regulators to develop national taxonomies  Starting from an operational application  Sharing and extending common modules Building blocks technique

The Tax project - a step forward for XBRL in Belgium  Overview  Important step towards a harmonized format among the Belgian regulators  Enhance the transparency of the financial information  Long term objectives  Reducing administrative burden for the companies asking information only once  Cutting down on fraud through immediate cross-checks between tax declaration and annual accounts

Architecture - Building blocks GCD Taxonomy Identification data Value Lists Taxonomy (Extended) Core Taxonomy Data Type Taxonomy (Extended) Common module Full taxonomy Abbr taxonomy NPO Full taxonomy NPO Abbr taxonomy NBB taxonomies Tax taxonomies NIS taxonomies

27 BOJ’s Experience in implementing XBRL Yoshiaki Wada Financial Systems and Bank Examination Department Bank of Japan © 2008 Bank of Japan Banking Panel at 18th XBRL International Conference October 16, 2008, Washington DC

28 1. Introduction of the BOJ Tokyo Maebashi Fukushima Sendai Aomori Kushiro Sapporo Hakodate Akita Niigata Matsumoto Kanazawa Okayama Kobe Matsue Hiroshima Shimonoseki Kitakyushu Fukuoka Nagasaki Kumamoto Kagoshima Oita Matsuyama Kochi Takamatsu Osaka Kyoto Nagoya Shizuoka Kofu Yokohama Naha  Central Bank of Japan, established in 1882  32 branches nationwide © 2008 Bank of Japan Head Office in Tokyo

29 © 2008 Bank of Japan 2 ． Monitoring Coverage of Financial Service Institutions Major Banks Regional Banks Shinkin Banks Foreign Banks Securities Firms, etc. Bank of Japan Importance of efficient data gathering scheme Monitoring data from about 570 FSIs BOJ covers about 570 FSIs and gathers various daily, weekly, monthly and annual data for monitoring.

© 2008 Bank of Japan 3 ． How we implemented XBRL (1) Three major issues to be solved: How to check whether XBRL is suitable for the BOJ’s data-gathering framework? How to make people aware of the merits of implementing XBRL? How to let people use XBRL? 30

© 2008 Bank of Japan Our approaches to the issues (1): 3 ． How we implemented XBRL (2) Step by step approach Public relations activities ⇒ Open seminar on XBRL, introduction of BOJ’s XBRL project to the public through the media ⇒ From a small-scale closed trial to a large-scale open test ⇒ From a one-time trial to cycle tests over several months 31

© 2008 Bank of Japan Our approaches to the issues (2): 4 ． How we implemented XBRL (3) Feedback of the latest technical advancements to the users ⇒ Adoption of the latest version of XBRL with Formula- Link Low cost and easy operational scheme ⇒ Development of tool for easily generating XBRL data and sharing it with FSIs free of charge 32

© 2008 Bank of Japan Preparation for testing Tool and taxonomy development Live Use of XBRL ･ Release of the Monthly B/S Taxonomy on banking a/c ･ Release of the Taxonomy Setting Tool ･ Release of the Monthly B/S Taxonomy on trust a/c ･ Release of the Monthly Lending Rate Report Taxonomy ・ Release of the Deposit Data Report Taxonomy ･ Release of the Monthly B/S Taxonomy on banking a/c ･ Release of the Taxonomy Setting Tool ･ Release of the Monthly B/S Taxonomy on trust a/c ･ Release of the Monthly Lending Rate Report Taxonomy ・ Release of the Deposit Data Report Taxonomy 5 ． Project history Three-phase test Feb 2006

34 © 2008 Bank of Japan 6 ． The BOJ’s XBRL based reporting scheme ② D/L of necessary taxonomy set ⑤ D/L of ＸＢＲＬ data ① U/L of taxonomy set to the library FSIs ＸＢＲＬ③ data creation and validation Data creation tool Error-free data files BOJ Error-free data files IP-VPN Database Post data validation Taxonomy library Taxonomy setting tool Taxo2 Ta xo3 Taxo1Taxo2 Earlier data release for BOJ’s users ④ U/L of XBRL data Select the taxonomy according to the report type Develop the taxonomy set according to the report type Excel XBRL Check for errors using the function of Formula-Link and correct the file XBRL

35 © 2007 Bank of Japan 7 ． Review of the last 30 months of live use (1) ⇒ Our XBRL tool has worked without fatal problems. 1. No down time ⇒ The reliability of the tool and availability of the total reporting workflow were confirmed. 2 ． All FSIs submitted monthly B/S data in XBRL format ⇒ Although XBRL was not mandatory in our reporting scheme, all FSIs submitted data in XBRL format voluntarily. ⇒ FSI’s degree of recognition of the new reporting scheme increased steadily.

36 © 2007 Bank of Japan 7 ． Review of the last 30 months of live use (2) 3 ． Revision and re-distribution of the current taxonomy and the release of the new range of taxonomy ⇒ The taxonomies have been revised several times due to revisions to Japanese company law or the requirement for new data. ⇒ A new range of taxonomies, such as those for monthly B/S of trust accounts and lending rate reports, was released. 4 ． Enhancement of efficiency of FSIs’ reporting work and the BOJ’s data processing ⇒ Decrease in manpower required for data reporting in the FSIs and for database operation in the BOJ ⇒ Earlier release of the accurate data to the BOJ’s data users.

37 © 2007 Bank of Japan Changes of the BOJ’s business flow on the Monthly B/S data processing Report deadline day XX+1 X+2~4 X+5X+6 day XX+1 X+5X+6 Preparation of data U/L Data U/L and validation within DB Data processing within DB Data release for BOJ users Error correction Data validation by XBRL, prior to data submission Reduction of post validation cost Reduction of post validation cost Data validation by XBRL, prior to data submission Reduction of post-validation cost Old Flow Early data release （ 2 to 4 days) Short cut! New Flow 8 ． Increased efficiency in the data reporting scheme (1)

38 © 2008 Bank of Japan Reduction of the required part-time manpower in the BOJ’s database operation team XBRL went live (Feb. 2006) 8 ． Example of enhancement of reporting efficiency(2)

© 2008 Bank of Japan 9 ． Users’ evaluation of BOJ’s XBRL tools (1) ・ Results of questionnaire about the usability of BOJ’s XBRL tools and reporting scheme, August 2008 Number of samples Number of responders Response rate Domestically licensed banks, such as major banks, local banks % Foreign banks % Shinkin banks % Total % 39

© 2008 Bank of Japan Operability of X-Port 9 ． Users’ evaluation of BOJ’s XBRL tools (2) 40

© 2008 Bank of Japan Performance of X-Port ── Total speed of data reading, transforming from Excel to XBRL and data-validation by Formula-Link Performance of X-Port ── Total speed of data reading, transforming from Excel to XBRL and data-validation by Formula-Link 9 ． Users’ evaluation of BOJ’s XBRL tools (3) 41

© 2008 Bank of Japan Function of X-Port ── Usefulness of pre-validation function by Formula-Link Function of X-Port ── Usefulness of pre-validation function by Formula-Link 9 ． Users’ evaluation of BOJ’s XBRL tools (4) 42

© 2008 Bank of Japan Function of X-Port ── Usefulness of error comment function Function of X-Port ── Usefulness of error comment function 9 ． Users’ evaluation of BOJ’s XBRL tools (5) 43

© 2008 Bank of Japan Contribution of X-Port for improving the data reporting work flow in FSIs 9. Users’ evaluation of BOJ’s XBRL tools (6) 44

© 2008 Bank of Japan Other comments ・ There was no request to stop XBRL reporting. In fact, some banks want the range of XBRL based reporting to be expanded. ── “Since XBRL seems to be becoming a major reporting scheme in society, please expand the range of BOJ’s XBRL reporting” ── “Data validation is very useful – we hope it is adopted for other reports” ・ There was no request to stop XBRL reporting. In fact, some banks want the range of XBRL based reporting to be expanded. ── “Since XBRL seems to be becoming a major reporting scheme in society, please expand the range of BOJ’s XBRL reporting” ── “Data validation is very useful – we hope it is adopted for other reports” ・ Some FSIs want a one-stop reporting scheme to reduce the reporting burden. ── “Why is integrated reporting not possible? Why should the same information be submitted in Excel, XML and XBRL to different authorities?” ・ Some FSIs want a one-stop reporting scheme to reduce the reporting burden. ── “Why is integrated reporting not possible? Why should the same information be submitted in Excel, XML and XBRL to different authorities?” ・ Many FSIs require functional linkage between X-Port and IP-VPN system. ── “Could the data compression function of X-Port be integrated with the encryption function of IP-VPN?” ・ Many FSIs require functional linkage between X-Port and IP-VPN system. ── “Could the data compression function of X-Port be integrated with the encryption function of IP-VPN?” 9 ． Users’ evaluation of BOJ’s XBRL tools (7) 45

© 2008 Bank of Japan Key factors for smooth implementation: 10 ． Some empirical feedback from the BOJ’ Project Taxonomy with high maintainability User-friendly tool Well-designed reporting scheme 46 Well-organized project team 46

© 2008 Bank of Japan ． BOJ’s XBRL Team

© 2008 Bank of Japan All-Star Cast of my Data Center Section !

Jon Wisnieski Senior Information Systems Specialist Business Case for Formulas

Agenda  XBRL Application  Formula Benefits  Quality Standards and  Business and Performance Metrics

XBRL Application  Three banking agencies developed the Central Data Repository (CDR)  Used XBRL to define and transport data  Data receipt  Data validation  Storage  Distribution  CDR launched on October 1, 2005  Key policy change ~ pre-validation using XBRL  Very Successful implementation

Call Reporting Before XBRL  Validation routines and formulas stored in and processed by two systems (FRB, FDIC)  Banks submit data after some minimal checks in their software - inconsistencies between preparation software packages  Software vendors receive Call Report metadata from Excel, PDF, and Word documents – cut and paste into their software  Agency analysts would check data quality once files had been submitted and contact bankers with any questions – often 1-3 weeks after initial submission

Call Reporting After XBRL  FFIEC developed the XBRL-based CDR with Unisys Corporation as systems integrator  Metadata stored in XBRL taxonomy files now available to anyone  The same taxonomy files that contain validation criteria the agencies use in the CDR are used in Call Report software vendor packages  Banks are required to check the quality of their data before submitting  Agencies do not accept data with quality problems  Quality assurance work is done by reporters up front, when it is more efficient  Agencies receive high quality data sooner—lower cost

Benefits  … and therefore powerful  A standard for expressing:  the data to be exchanged  the instructions for providing the data  an interface or form or presentation  the validation criteria for checking the quality of the data XBRL is Expressive

Quality Standards What are they?  Formulas that are expressed in XBRL and shared with stakeholders  Evaluate to either ‘true’ or ‘false’  Check a relationship that either must be true – or – that, if true, point to an anomaly to be researched

Quality Standards  Validity – equations that must hold true or the data is inaccurate  Quality – data relationships that help identify anomalies  Reportability – identify what financial concepts an entity should submit based on their structural or financial characteristics

Business and Performance Metrics What are they?  Modify data by (+, -, /, *)  Apply functions (annualize, %change)  Consistently applied across  Data  Industry  Comparability

Business and Performance Metrics  Capital Adequacy  Asset Quality  Earnings  Liquidity  Growth Rates  Industry Standards  Regulatory  International ~ Basel II

Results—Everyone Sees the Same Data!  Taxonomy = authoritative source, used by all  Rules for what data to report  Data quality standards  Communication between all parties improved  Banking agencies  Call Report Software Vendors  Financial institutions  Increased Data Transparency Back to Contents Business and Performance Metrics

Questions - Comments?

© 2008 Bank of Japan END OF PRESENTATION 61