Banque de France Secrétariat général de la Commission bancaire IX European Banking Supervisors XBRL Workshop SURFI : Unified FInancial Reporting System Dfhndkl Fvwdklm ldkfnwdklm Paris, October 1st, 2008 Jean-Luc Menda Deputy Director Sylviane Delarue Head of IT department Commission bancaire Banque de France SGCB

Presentation overview 1. Commission bancaire IT strategy 2. Focus on SURFI - strategic and functional aspects - building of the taxonomies - the present “BAFI” system - SURFI IT project

1. Commission bancaire IT strategy Main IT strategy elements : Implement the new COREP and FINREP reports in compliance with the European harmonized framework Follow the CEBS recommendation to adopt XBRL in order to foster harmonization Change our reporting framework, promote harmonization and streamlining, launch the SURFI project Modernize our banks rating system and IT studies system

1. Commission bancaire IT strategy In this framework, progressive, but complete change of our reporting system… …in 3 stages: COFINREP project implementing COREP et FINREP specifications: beginning of 2006 – mid 2008; MODEC project modernizing the civil status data gathering: June 2007 – 1st semester 2010; SURFI project modernizing and streamlining regulatory data gathering: April 2008 – June 2010

1. Commission bancaire IT strategy MODEC project SURFI project COFINREP project MODEC project Go live SURFI project v.1 SURFI project v.2 La directive européenne = référence commune tendance > séparation des orientations comptables et prudentielles FINREP conduit par la Belgique Dans cad III 3thématiques sont abordées : risques de marché, risque de crédit, risque opérationnel, même standardisation au niveau international l ’ensemble des EC sera impacté Les superviseurs travaillent sur des normes de calcul et plus de cohérence entre normes comptables et prudentielles, Conception de 25 tableaux déclinés en 170 combinaisons différentes Le nombre de docts existant dans BAFI sera multiplié par 2 suite à CAD III Il sera pris en compte pour 1 établissement du fait qu ’il dispose d ’outils + / - fins pour la prise en compte de sa politique de risque SURFI Business study Banking industry consultation Taxonomies building Financial Agents Information System Upgrade Beginning of 2006 Mid-2007 April 2008 End of 2008 SURFI Taxonomy finalization June 2010 Dec. 2010

1. Commission bancaire IT strategy COFINREP project It permitted the implementation of the Basel II and IFRS impacts on the regulatory reports… … following the CEBS recommandations about the use of the XBRL standard for harmonized European COREP et FINREP reports. Launched in 1993, the present BAFI system, using a proprietary data format, couldn’t be upgraded to reach the new specifications. A finished project : New functionalities since September, dedicated to the supervision staff (e.g. specific reports); Next improvment : the implementation of the « tolerance margin ».

1. Commission bancaire IT strategy MODEC project Offering to the banking industry a state-of-the-art interactive software dedicated to civil status processes ; Being able to get live data transmission from banks and give them feedback ; Taking into account the new European regulatory requirements : – integrate new categories of banks, in compliance with european directives, – and reinforce the disclosure (the directive on « Systems of payment » requires the creation of an on-line registered bank database »  Allowing the 80 IT systems of BoF to have an easy real-time acces to this system of reference (WEB site, WEB services, WEBSPHERE, ORACLE) End of the project : 1st semester 2010 (this system of reference is necessary for SURFI)

2. SURFI : Unified Financial Reporting System Present data collection system, BAFI Reporting entities : MFIs – according to the French banking law, id. broad definition -, and investment firms Coverage : data for statistical as well as prudential purposes, but BoP data partially out of the scope Same database, but limited harmonization of concepts and reporting formats, generating double collection of data On the technical side, database system based on a proprietary system developed in 1993, therefore somewhat mature

2. SURFI : Unified Financial Reporting System Modernizing the reporting system Result of a discussion process with the banking industry following the introduction of COREP and FINREP The industry requested : a significant reduction of the reporting burden the elimination of double collection of data for supervisory and statistical purposes a better coordination in the definition of new reporting requirements between Banque de France departments

2. SURFI : Unified Financial Reporting System Launched in June 2007, the main objectives of the project Harmonize data collection for supervisory and statistical purposes, in eliminating double collection of data Alleviate the reporting burden through the streamlining of the entire present reporting system Take fully into account the ECB statistical revision package and articulate our own schedule Switch from a template centered approach to a data centrix approach, capitalizing on our XBRL experience for COREP and FINREP.

2. SURFI : Unified Financial Reporting System Simplified scope of the project (Tier 1) French Gaaps ( Tier 2) French Gaaps (Tier 3) IFRS or French Gaaps Monetary statistics =France (1) Prudential data =France + branches abroad =social accounts (2) Consolidated Prudential data (3)

2. SURFI : Unified Financial Reporting System Main results in terms of harmonization Broad harmonization between tier 1 and tier 2 data, relying on the same accounting standards (French Gaaps) ; Limited between tiers 1 and 2 on the one side, and consolidated data established either on IFRS or French Gaaps, depending on the institution

2. SURFI : Unified Financial Reporting System Potential links between counterpart breakdowns Find bridges between the different reporting schemes (ESA95, FINREP and COREP) Make it easier for MFIs to manage counterparty breakdowns Build a table allowing to bridge ESA95 counterpart sectors with SURFI counterparts, as well as COREP and FINREP

2. SURFI : Unified Financial Reporting System Other achievements of the project Elimination of double collection of data : every data will be sent once either for statistical or prudential purpose A significant reduction in the volume of data A more risk-based oriented system consisting of core information sent by every institution, complemented by information sent depending on the level of activity in different areas (thresholds for interbank operations, financial instruments, credit…) Ready to start building the taxonomy…

Presentation overview Strategical axis in terms of operational IT objectives. IS Modernization in 3 stages Focus on SURFI - strategic and functional aspects - building of the taxonomies - The present “BAFI” system - SURFI IT project

Focus on SURFI – building of the taxonomies 1st stage Design of the SURFI future templates revised by three working groups : almost finalized. the presentation rules have been determined regarding the format and the header, use of a specific colour code to identify dimension names and their values, facts, forbidden data, presentation labels. the elements and dimensions codification will be implemented at the same time. Templates validation by Monetary departments, banking commission, ultramarine departments : in progress.

Focus on SURFI – building of the taxonomies - ex modèle 8080 Après intro Partie théorique de présentation des données des états (§ 2 à 5) ; Puis au § 6 on abordera les contrôles et pour la partie des contrôles au sein des états COREP on s’appuiera sur des exemples concrets d’états avec des anomalies ; Enfin au § 7 analyse de la qualité du portefeuille de crédit : identifier les données susceptibles d’être utilisées pour analyser le profil de risque d’un établissement.

Focus on SURFI – building of the taxonomies 2nd stage implementation of the working-out principles of the SURFI taxonomy : building of «primary taxonomies and dimensions». The « primary taxonomies» elements come from : elements from the « accounting class data tree » other elements resulting from the templates each element has its own concept name, label, hierarchical links with other elements, regulatory references and, if necessary, calculation links.

Focus on SURFI – building of the taxonomies – data logical tree Après intro Partie théorique de présentation des données des états (§ 2 à 5) ; Puis au § 6 on abordera les contrôles et pour la partie des contrôles au sein des états COREP on s’appuiera sur des exemples concrets d’états avec des anomalies ; Enfin au § 7 analyse de la qualité du portefeuille de crédit : identifier les données susceptibles d’être utilisées pour analyser le profil de risque d’un établissement.

Focus on SURFI – building of the taxonomies 2nd stage : the XBRL element name will be determined from the element labels belonging to the data tree or the templates. the normalisation of the template presentation and the data tree elements will make easier the automatic initialization of most of the future taxonomies via a purpose-built tool. SURFI templates naming rules are under validation. The templates will be grouped by activity blocks (associated to a threshold or a theme).

Focus on SURFI – building of the taxonomies 3rd stage the « dimensions taxonomies », their values and their hierarchical order are being elaborated. for each template : design of the hypercubes. choice of a a modularized model of taxonomy architecture (FINREP 1.3).

Focus on SURFI – building of the taxonomies Some figures about SURFI Taxonomy : 64 templates (some of them with sub templates) 900 elements from the data logical tree 900 elements outside the data logical tree 15 dimensions (until 6 depth levels)

Focus on SURFI – building of the taxonomies – road map end of September 2008 : templates finalization. end of November 2008 : taxonomy building. December 2008 : validation. end of December 2008 : publication of a first draft version.

Remaining tasks… Internal checkings design, ECB requirements to integrate, New regulations writing (BC and BoF), Recovery and/or re using of the BAFI data

Current situation of IT system BAFI Financial Institution Information System Accreditation Input Output Civil statuts data Configuration Prudential and accounting Reporting Inside applications CB/BDF Bâle II SIGNECB COREP Instances Data Control and management IFRS Data mining FINREP Instances XBRL Taxonomy management Accreditation COFINREP

49.000 queries/day, i.e. 2 per second, 550 night batch prosesses, Legacy system : BAFI BAFI in few figures : 840 end-users (510 in headquarters departments, 330 in the subsidiaries) 49.000 queries/day, i.e. 2 per second, 550 night batch prosesses, 800 day batch processes, 100 file transfers (input ou output) per day, 31 incidents per month, 1.400 programs. 563 incidents entre décembre 2004 et mai 2006 du nombre d’abend référencés par le centre sur BAFI. Soit une moyenne de 31 incidents par mois. 17 615 368 transactions entre décembre 2004 et mai 2006. Soit une moyenne de 978 632 transactions par mois. Soit pour un mois moyen de 20 jours : 48 932 par jour. Soit 1,7 transactions par seconde (sur une journée de 8 heures). 40.393 transactions IMS sur les 22 jours de travail entre le 3 mai 2006 et le 1er juin 2006 (les 8 mai et jeudi de l’Ascension compris). 44.429 sans compter ces deux jours exceptionnels. (sur 6 heures de travail on est à deux transactions par seconde, sur 7 heures à 1,7, et sur 8 heures à 1,5).

Source : SIGD -Banque de France - février 2005 Legacy system : BAFI Civil status data 910 credit institutions (banks and financial firms) 156 investment firms Accounting data 23 000 000 lines directly available 455 tables 687 screens or reports 430 processing batches 563 incidents entre décembre 2004 et mai 2006 du nombre d’abend référencés par le centre sur BAFI. Soit une moyenne de 31 incidents par mois. 17 615 368 transactions entre décembre 2004 et mai 2006. Soit une moyenne de 978 632 transactions par mois. Soit pour un mois moyen de 20 jours : 48 932 par jour. Soit 1,7 transactions par seconde (sur une journée de 8 heures). 40.393 transactions IMS sur les 22 jours de travail entre le 3 mai 2006 et le 1er juin 2006 (les 8 mai et jeudi de l’Ascension compris). 44.429 sans compter ces deux jours exceptionnels. (sur 6 heures de travail on est à deux transactions par seconde, sur 7 heures à 1,7, et sur 8 heures à 1,5). Source : SIGD -Banque de France - février 2005

Focus on SURFI - IT part of the project IT project milestones : Launch of the project : beginning of June 2008 ; Requirements document created during the summer in order to launch rapidly an open tender ; Opening of the tests platform for the external actors in january 2010 Opening of the 1st version of the SURFI portal in July 2010 Opening of the 2nd version of the SURFI portal in December 2010 ;

Focus on SURFI - IT part of the project Business Controls & storage Reception File gathering Signature management Acknoledgement of receipt Feedback + Specific messages Structure Controls Taxonomies Reference system Files system Taxonomies management Repository exploration Business controls synthesis Exporting, interfaces, calculation Taxonomy controls & anomalies management validated data Design, Versioning &Validation Specific controls, validation rules Storage, DOD-SDESS

Scope of the project : main functionnalities Reporting duties defining and remittance monitoring : Who, what and when Mistakes or late data sending Exceptions management Main issue Only one taxonomy but different rules and periods of remittances Different activity blocks of facts expected varying by threshold or a theme.

Scope of the project : main functionnalities 1st and 2nd level controls : Structure & format, arithmetic & accountancy controls. Main controls : identifier, taxonomies, inter-taxonomies et inter-dates, tolerance margins, duplicate and missing facts. Main issues Formulae specifications aren’t ready yet Tools haven’t been validated either Specific controls will be inevitable From partial instances and aggregated instances

Scope of the project : main functionnalities Storage : In files system or in data base system : the choice hasn’t been made Main issue Performance design, calculation and visualization of simple and complex reportings and synthesis With XBRL tools or with others tools (BO, SAS) : the choice hasn’t been made

Scope of the project : others functionnalities All the functions of an « up-to-date » IT system Static data management Taxonomies management Main issue : lack of versionning specifications Habilitation management Easy navigation in the IT software Exporting to other systems In XBRL In flat files To EXCEL spreadsheets

Main orientations Collecting partial data in order to take into account the different remittance periods. This possibility will imply aggregating internally the final and unique instance for a date and for a financial institution. Use of external taxonomies (e.g. COREP Host) possible Small credit firms will be able to type their data into specific internet pages (instead of sending an XBRL file) The retrieval of COFINREP data must be done . Comité de pilotage SURFI 09/09/2008

Main orientations All the technical components of chosen solution have to be known and used into the existing or planned production lines of BOF. The total compatibility with XBRL 2.1. and dimensions 1.0 specifications is compusory.The road map concerning Formulae, versionning and rendering is requiered. The data management solution (file system versus data base system) will have to be optimized and met the BoF requierements, especially in terms of complex reporting) Preference for an XBRL software package (instead of programming a new one) Comité de pilotage SURFI 09/09/2008

Banque de France Secrétariat général de la Commission bancaire Thank you for your attention !