COREP - FINREP - XBRL SGCB COREP - FINREP Implementation in France : first lessons 16th International XBRL Conference Vancouver, 5 December 2007 Jean-Luc MENDA Deputy Director, Policy and Research Secrétariat général de la Commission bancaire COREP - FINREP - XBRL SGCB

COREP - FINREP - XBRL SGCB 2 COREP - FINREP Implementation 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

COREP - FINREP - XBRL SGCB 3 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

COREP - FINREP - XBRL SGCB 4 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

COREP - FINREP - XBRL SGCB 5 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

COREP - FINREP - XBRL SGCB 6 COREP  13 january 2006 : COREP reporting framework released by CEBS =>  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 =>  Start of the consultative period on the French framework with professional associations  28 june 2006 : Instruction n° adopted by the Commission bancaire 1. Project objectives : a european framework

COREP - FINREP - XBRL SGCB 7 COREP and FINREP taxonomies  COREP => european taxonomy available on 20 september 2006  COREP => French first version fr discussion (0.1) published on 1st december version 0.2 on 15 january approved version 1.0 published on 5 february  FINREP => european taxonomy available on 6 october 2006  FINREP => French first version for discussion (0.1) published on 26 october version 0.2 on 15 january approved version 1.0 published on 5 february Project objectives : a european framework

COREP - FINREP - XBRL SGCB 8 1. Project objectives : a european framework Taxonomy editing tool delivery, getting started and training TAXONOMYTAXONOMY First draft European taxonomies 01/2006 Launch Taxonomy extensions Final version european Taxonomies & Beginning of French taxonomies 09/2006 French taxonomy definitions Validated taxonomies Taxonomies available for the professional public 10/ /2007 Project management and supervision Taxonomy finalization Professional’s Feed back

COREP - FINREP - XBRL SGCB 9 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

COREP - FINREP - XBRL SGCB 10 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

COREP - FINREP - XBRL SGCB 11 2 The French Banking Commission COREP - FINREP project Financial Institution Information System Prudential and accounting Reporting Bâle II IFRS COREP Instances FINREP Instances SIGNECB Inside applications CB/BDF Accreditation InputOutput Civil statuts data Configuration Accreditation Data Control and management Data mining XBRL Taxonomy management BAFI COFINREP

COREP - FINREP - XBRL SGCB 12 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 concerned 19 templates and about data (facts) FINREP:about 100 entities concerned 42 tables (27 templates ) about data Final users : 300 supervisors and inspectors Team of 4 taxonomy managers

COREP - FINREP - XBRL SGCB 13 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 PORTALV1PORTALV1 PORTALV2PORTALV2

COREP - FINREP - XBRL SGCB 14 2 The French Banking Commission COREP - FINREP project Global conception Launch 06/2006 Portal V.1 Project management and supervision Validation 07/2006 Go live Portal V1 Go live Portal V2 PORTALPORTAL Portal V.2 01/200806/2007

COREP - FINREP - XBRL SGCB 15 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)

COREP - FINREP - XBRL SGCB 16 - Taxonomy published - Intances workflow - Taxonomy creation - Instance management Instance Document BACKEND Taxonomy Financials institutions (submitters) Databases servers Corporate Directory Server: BAFI … Instance Document Instance Document Instance Document Instance Document Receipt Management Reception Management Taxonomies INTRANET EXTRANET Taxonomy control Taxonomy Mistakes/Errors Taxonomy management Control and storage Amounts ctrl. BAFI/COFINREP Comparision Reporting synthesis Conception Reporting calculation Reporting Extraction COFINREPReporting Errors Reporting synthesis Reference data management Habilitations Taxonomy Instance Document 2 The French Banking Commission COREP - FINREP project

COREP - FINREP - XBRL SGCB 17 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

COREP - FINREP - XBRL SGCB 18 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

COREP - FINREP - XBRL SGCB 19 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.

COREP - FINREP - XBRL SGCB 20 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.

COREP - FINREP - XBRL SGCB 21 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.

COREP - FINREP - XBRL SGCB 22 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.

COREP - FINREP - XBRL SGCB QUESTIONS ? Secrétariat général de la Commission bancaire SGCB