1 XBRL: The vision of Dexia Pellizzari Giancarlo Head of Prudential Policy Dexia Group

2 Dexia: an European group The regulatory environment Main challenges Complexity ? XBRL Where are we ? Where do we go ? How to do it ? EU-US convergence Conclusions

3 Dexia Holding: 27,5 EURBn Capitalization, world leader in public financing Dexia Bank Belgique 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, staff members and present in 33 countries

4 Business portfolio : Segment contribution to net income - Group share (1) Investor Services Personal Financial Services Treasury and Financial Markets Public/Project Finance and Credit enhancement (1) Excluding non-operating items and central assets Asset Management Insurance Net income – Group share FY 2005: EUR 2,038 M FY 2006:EUR 2,750 M Net income – Group share FY 2005: EUR 2,038 M FY 2006:EUR 2,750 M

5 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) Host supervisors EU supervisors Bundesbank – Bafin (Germany) Banca dItalia (Italy) Banco dEspana (Spain) Etc. Other countries BRSA (Turkey) SEC (USA) OFSI (Canada) Japan FSA Singapore Etc.

6 The reporting COREP Group level : Belgium Entity level : Belgium, France, Luxembourg Subsidiary level : Italy, Austria, Germany, etc. FINREP Group level : no reporting required Entity level : Belgium, France, Luxembourg Subsidiary level : Italy, Austria, etc. Others: USA requirements, Solvency ratio, local requirements

7 Cross regime requirements (IFRS, Basel II, Solvency II) Cross country interpretation (within one single regime) Cross business needs (Risk, Accounting, Business control, others ?) Timeline for implementing CEBS update in the IT systems of the bank: CEBS release March 200x End of consultation June 200x Application for March 200x+1 Without taking into account the national extensions… All these should be integrated in One IT system One platform One database

8 Basel II IFRS Solvency II Pillar I Pillar III IFRS 7 F/S Pillar III Pillar I + notes Group Group Group Group BE (+group)BE BE FR LU BE FR LU

9 Systèmes comptables Systèmes de gestion Entité de booking X Fichiers DMV3 Table données INPUT Résultats détaillés FERMAT Moteur de calcul RWA Reporting réglementaire Résultats agrégés Risque Marché Résultats agrégés Risque Crédit Résultats agrégés Risque Opérationnel Données Fonds Propres Etats COREP Etats FINREP Résultats agrégés Comptables MAGNITUDE Risque de marché Risque opérationnel FERMATJ-Port

10 Dexia group BIL group RBC - DFS Dexia Asset Management group Dexia Bank group Dexia Insurance group Adinfo group Deniz Bank Group Dexia Crédit Local group Banking institutions Insurance companies Other CrediopFSA IFRS US GAAP No Conso (BE GAAP) Lux GAAP

11 BE LU FR SAP Holding MAGNITUDE COMMON PARAM SPEC. LOCAL PARAM DBB DCL DBL STATUTORY CONSOLIDATED CONSO DHLD CONSO DBB CONSO DCL CONSO DBL VISUAL SCOPE MIS CONSO ESSBASE CHECK INTERNAL REPORTING EXTERNAL REPORTING FINREP COREP XBRL

12 Many EU countries where Dexia is active are using XBRL as reporting language but Not in all countries Mostly presented and implemented as an additional burden In Belgium an additional XBRL reporting is required for the Balance Sheet Office reporting (statutory accounts of approx companies), National Bank of Belgium.

13 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 »

14 Used by credit departments Used instead of xls on websites (like Microsoft, Monte dei Paschi di Siena, etc.) Other regulatory reporting (like VAT and tax in NL, AML in Spain, etc.) Internal reporting (reconciliation Consolidation and Risk databases) Mapping with new regulatory requirements Necessity to create a working group within the group with technical specialists and business specialists Better coordination Decrease of cost

15 A potential integration tool for the group reporting External : Known and understood by all May be the base of a worldwide reporting May avoid repetitive reporting in different presentations, but with the same content to regulators and local authorities Internal : May be the base for internal reporting (consolidation) May allow drill-down analysis with a good organisation of taxonomy Will make the life easier for Financial Communication and members of the Boards when they compare the contribution of one company in the consolidated accounts with the financial statements published by a subsidiary in its country

16 A potential integration tool for groups Only one reporting, for internal and external reporting Possibilities for people to move from one company to another Advantage for managers to understand how transactions are recorded and the impact on the financial statements Powerful tool for the controller and people from investor relations to analyse the contents of the financial statements, both in the group and sub – groups, including the local regulatory reporting Use of IFRS and worldwide taxonomy may help groups to more easily integrate newly acquired subsidiaries

17 Regulatory interpretations Example Collateral definition Equity split Counterparties Calculations Etc. Software offer COREP + FINREP IFRS Internal Motivation of people (difficulty to see the benefits)

18 Stronger CEBS policy, but also more communication to banks with regards to the XBRL benefits (XBRL should not be a cost and administrative burden) Stronger banking industry involvement Software providers needs to understand the banks real needs One single definition of taxonomy

19 Press release of April 2007: cooperation between US and EU, including regulatory matters BUT: SEC-FDIC EU CEBS This way ? Or this way ? Bundes bank SGCBBdICBFAetc.FSA

20 Within ONE group ONE tag ONE definition ONE validation/business rule ONE taxonomy ONE country ONE EU reporting ONE CEBS (FINREP-COREP) EU base reporting completed by additional country requirements => Need to follow the XBRL principles