1 Progress in BOJ’s XBRL Pilot Project Nov Yoshiaki Wada Bank Examination and Surveillance Department Bank of Japan © 2004 Bank of Japan

2 1 ． The role of the BOJ within Japanese Financial Systems and the progress in the XBRL pilot project BOJ’s branch network © 2004 Bank of Japan Project history The BOJ way to provide and receive different types of information and apply them to FSI supervision Range of FSIs covered by BOJ examination / monitoring, and the participants in the pilot project ２

3 BOJ’s branches network © 2004 Bank of Japan ● Head Office : Tokyo Branches : Kushiro, Sapporo, Hakodate, Aomori, Akita Sendai, Fukushima, Maebashi, Yokohama, Niigata, Kanazawa, Kofu, Matsumoto, Shizuoka, Nagoya, Kyoto, Osaka Kobe, Okayama, Hiroshima, Matsue, Shimonoseki, Takamatsu, Matsuyama, Kochi, Kitakyusyu, Fukuoka, Oita, Nagasaki, Kumamoto, Kagoshima, Naha Tokyo Maebashi Fukushima Sendai Aomori Kushiro Sapporo Hakodate Akita Niigata Matsumoto Kanazawa Okayama Kobe Matsue Hiroshima Shimonoseki Kitakyusyu Fukuoka Nagasaki Kumamoto Kagoshima Oita Matsuyama Kochi Takamatsu Osaka Kyoto Nagoya Shizuoka Kofu Yokohama Naha

4 Range of FSIs covered by BOJ examination / monitoring, and the participants to the pilot project © 2004 Bank of Japan about 560 FSIs (end of March 2004) Major Banks Regional Banks Shinkin Banks Foreign Banks Securities Firm etc. Test Phase 1 Test Phase 2 ( 31 participants ) ( 4 participants )

5 Project history © 2004 Bank of Japan Preparation for the test Phase 1 of the test Session with 4 Major Banks Test part June, 2003 July – Sept. Oct. Nov. – Dec. January, 2004 March Phase 2 of the test Investigation Hearing Taxonomy creation Functional development Join XBRL - Japan Briefing to executives Tool evaluation Part 1Part 2 July Sept.

6 The BOJ way to provide and receive different types of information and apply them to FSI supervision © 2004 Bank of Japan Applicability of XBRL BOJ FSI Corporation BOJ net Reporting systems, incl. VPN online data gathering system Host system PC system File format conversion Character code conversion DBs original format Individuals Files Papers Host computer File format conversion Character code conversion Key entry Character code conversion PC Accounting table creation File creation Storage Intranet Application to FSI supervision (data format for printing) Vertical and horizontal position and data specification Financial DB Text format Excel, Word, Text, CSV, XML Paper-based Publication of a variety of statistics

7 2 ． Understanding the pilot project Project overview © 2004 Bank of Japan ７ Concept of BOJ’s VPN system Taxonomy structure

8 Project overview ① Purpose © 2004 Bank of Japan ・ Promote understanding of XBRL within the FSIs ・ Phase 1 ────── 4 Mega banks （ XBRL- Japan member ） Participants Timing of the test ・ Verify both the technical and operational usefulness of XBRL ・ Phase1 ： December 2003 to March 2004 ・ Phase 2 (Part 2) ── 4 Mega banks ･ Phase2 ： (Part 1) July 2004 (Part 2) Sept 2004 (Part 1) ── 31 local and other banks （ non XBRL- Japan member ）

9 © 2004 Bank of Japan Wanted! XBRL Data Communication Test – Participant Invitation (Scope of Test) - Create an XBRL data file and transmit to the Bank of Japan (Date of Execution /Recruitment Period) - July / th June (Number and Type of Participants) - 20 BOJ Partner FSIs (Application) -Yoshiaki Wada, Bank Examination and Surveillance Department, BOJ

10 Project overview ② © 2004 Bank of Japan （ Phase 1 ） ･ Test by XBRL-Japan member banks ・ Data transfer between the BOJ and FSIs using XBRL format Scope of the test ・ Accounting tables for Target reports （ Phase 2 ） ･ P/L tables for annual/half year business report (Part 2 of Phase2) monthly balances (Phase1 ～ Part 1 of Phase2) ･ Test by banks including non XBRL- Japan member ･ Test of newly structured taxonomy ･ Possibility of using VPN system for secure data transfer ･ Test of XBRL Spec 2.1

11 Concept of BOJ’s VPN system © 2004 Bank of Japan IP-VPN net-work BOJ Up load of reporting forms Down load of reported data Reporting forms FSIs PC in FSIs PC in BOJ Data reception Data decryption Virus test Down load of reporting forms Data transmission Reporting data input Data encryption ＩＰ－ＶＰＮ ： Ｉｎｔｅｒｎｅｔ Ｐｒｏｔｏｃｏｌ － Ｖｉｒ ｔｕａｌ Ｐｒｉｖａｔｅ Ｎｅｔｗｏｒｋ Server system

12 Taxonomy Structure Methodology ① Each account varies according to FSI business type © 2004 Bank of Japan The taxonomy for internal use has a structure which maps the roles of each type of maintenance engineer to enable job allotment. common taxonomy delta taxonomyTaxonomy for internal use is composed of a common taxonomy for all financial institutions and a delta taxonomy according to the business type. Definition of the concept itself is separated from the relationship between concepts Ease of maintenance is of primary consideration Applicability to other reports The methodology of separating the common and delta taxonomy is applicable, for example, to the annual business report, for changes to due date and in reporting data types. Taxonomy for internal use Reporting TaxonomyThe structure is composed of “Taxonomy for internal use” (concept itself defined with schema, label link and reference link) and “Reporting Taxonomy” (relationships between concepts defined using presentation link, calculation link and definition link).

13 Taxonomy Structure Methodology ② © 2004 Bank of Japan Taxonomy common to all FSI Taxonomy common to A ～ C Taxonomy common to A ～ C & D Taxonomy common to domestic FSI Taxonomy common to A ～ B Taxonomy common to D ～ E Taxonomy for accounting item a Taxonomy for accounting item b Taxonomy common to B ～ C D Taxonomy E Taxonomy C taxonomy Taxonomy common to A ～ B & D Type A １ Type A2Type BType C Type D １ Type D2Type E L S Schema R P C D Label-link Reference-link Presentation-link Calculation-link Definition-link C S D PL R Taxonomy for internal use C S D PL R Taxonomy for reporting Taxonomy set for FSIs (DTS) Set the schema, label - link, reference-link. Set the presentation-link, calculation-link and definition- link. Import Taxonomy Structure Taxonomy for reporting consists of necessary internal taxonomy units. Delta Taxonomy Taxonomy for reporting, designed for each FSI type Taxonomy for internal use Common Taxonomy

14 3 ． Test summary Test results and summary of Phase 2 Evaluation of Phase 2 by test participant FSIs © 2004 Bank of Japan １３

15 Results and summary of Phase 2 © 2004 Bank of Japan Phase 2 pilot project - Part 1 （ July ） Need for reorganization to accept XBRL data Importance of validation Study of storage and re-use of XBRL data Phase 2 pilot project - Part2 （ Sept. ） Expectations for practical use Understanding of XBRL penetrates to a broader range of FSIs Both the technical and operational usefulness of XBRL is confirmed Created the taxonomy of the monthly accounting table using Spec. 2.0 (Bank of Japan) Created the taxonomy for the annual business report using Spec. 2.1 (Bank of Japan) Able to generate an instance in XBRL format without any problem using Excel table which includes the monthly accounting table (FSIs) Received the data and could re-create the table (Bank of Japan) Able to generate an instance in XBRL format without any problem using Excel table which includes the annual business report (FSIs) The data was received online and could re-create the table (Bank of Japan)

16 Response to the Phase 2 questionnaire ① © 2004 Bank of Japan Summary of response (replies from 31 participating FSIs) Expanding recognition of XBRL ① Enables data validity check ② Enables the addition and checking of notes to the items ③ Enable verification of the link documents such as item definition etc. - XBRL name recognition ・・・ Approx. 80% - Felt the need to study XBRL through the pilot project ・・・ Approx. 60% - Main points where FSI felt the benefits of XBRL:

17 Response to the Phase 2 questionnaire ② © 2004 Bank of Japan Reasons for participation in the pilot project (i) Study of values and issues --- Analyzes and evaluates what type of actual value and impact can be obtained through the use of XBRL (ii) Understanding and confirmation --- Able to learn about XBRL (iii) Ease of participation --- Conditions to participate were simple, and so participation was easy. (iv) Experience to use the tools --- Wanted to use the XBRL conversion tools

18 Response to the Phase 2 questionnaire ③ © 2004 Bank of Japan Businesses where XBRL could be applied in the future Data storage and analysis External report generation In-house data collaboration - The kinds of businesses that would be able to use XBRL t Loan bsiness In-house account settlement Auditing Public relations

19 And now for the last word --- © 2004 Bank of Japan １８

20 Thank you for listening. © 2004 Bank of Japan １９