1. www.corep.info The COREP XBRL Project Steering Committee, 2005-06-03

2. www.corep.info 2 AGENDA 1.Business case 2.COREP concept 3.COREP project 4.COREP implementation 5.COREP next steps

3. www.corep.info 3 Business case: XBRL use on COREP Bank Risk Management Operations Counterparties Collateral … Aggregator Report ---------- ---------- ---------- Supervisor IS Supervisory Reports Other data … Reception Presentation, Analysis… Bank operations, controls…. XBRL instance

4. www.corep.info 4 Business case - Definition COREP: defining a COmmon REPorting framework around the solvency ratio for credit institutions and investment firms under the European Union Capital Requirements. (Based on Basel II, Pillar I) Committee of European Banking Supervisors www.c-ebs.org www.c-ebs.org

5. www.corep.info 5 Business case - requirements Flexibility: each supervisor is allowed to choose the scope as well as the level of aggregation of information required; the framework will allow for flexibility also to accommodate for differences in the exercise of the national options foreseen in the Capital Requirements, for instance with reference to the treatment of small institutions; Consistency: the same concepts and terminology have been used as far as possible; Standardization: the number of different templates has been minimized (business) and their representation has been formalized into XML/XBRL (computing).

6. www.corep.info 6 Business case – European framework Basel II Directives 2000/12 & 93/6 Country 1 FSA 1 Report 2Report 1 ------------ ------------ ------------ Country 3Country 2Country 25 FSA 2FSA 3FSA 25 Report 25 ----------------------------------------- ----------------------------------------- ----------------------------------------- ------------------------------------- Report 3 ----------------------------------------- ----------------------------------------- ----------------------------------------- ------------------------------------- National Regulation Transposition into national Legislation European Law 9X,XX% Basel II compatible National Implementation XBRL challenge!

7. www.corep.info 7 COREP concept: extension Large report Medium report S mall report Custom report COREP superset of reports

8. www.corep.info 8 Pillar I Capital COREP Templates Today Pillar I Capital COREP concept: extension Pillar II Supervision Pillar III Market COREP vs. Pillars COREP vs. Pillars Future templates?

9. www.corep.info 9 COREP concept: template Dimension 2 Dimension 1 Dimension 3 Dimension 4 Measure Template:

10. www.corep.info 10 COREP concept: Data Matrix EXPOSURE TYPES STANDARD APPROACH CAPITAL REQUIREMENTS EXPOSURE CLASSES All the dimensions are optional!

11. www.corep.info 11 COREP Project: forecast by January 21 st

12. www.corep.info 12 COREP project: goals Deliverables Initial COREP XBRL taxonomy 2005-05-13 To be updated following business changes Set of non-confidential test cases Project X Banks To be populated when Banks decide to participate Basic collaborative environment corep.info To be improved if helping COREP implementation

13. www.corep.info 13 COREP project: Architecture Initial XML/XBRL taxonomy based in COREP Technological challenge 20 Dimensions Exposure type, Exposure classes, Risk weights… 32 Measure sets Exposure value, Capital requirements, … 31 Templates (Dimensions x Measures) SA Capital requirements, IRB Capital requirements… Taxonomy description at www.corep.info Simplest solution for the easiest implementation Key XBRL gurus are participating in COREP

14. www.corep.info 14 COREP project: Instance 0 0 - - DemoBank -- 2005-12-31 <dims:dimMemRef xlink:type="simple" xlink:href="t-op-2005-06-30.xsd#t-op_DimensionNameBankingActivities"> d-re:TotalBankingActivitiesSubjectToBia - - DemoBank -- 2005-12-31 - d-re:TotalBankingActivitiesSubjectToSa

15. www.corep.info 15 COREP project: Test cases Set of non-confidential test cases: Anonymous: No reputation risk Public: to be used everywhere Early involvement of banks & users Hands-on experience in COREP Quality control of XBRL taxonomies As simple as fulfilling a spreadsheet but… With the intrinsic complexity of Basel II

16. www.corep.info 16 COREP project: Test cases flow Anonymous Information e-mail www.corep.info Anonymous Comments Public Repository COREP-XBRL Group COLLABORATING INSTITUTION test@corep.info Excel File XBRL printout Doc, Pdf,… Files 2 3 4 5 1 COLLABORATING INSTITUTIONS SUPERVISORS XBRL COMMUNITY OTHERS XBRL Instance Anonymous upload Non compliant test cases Excel File Doc File Mapper PROJECTMANAGEMENTPROJECTMANAGEMENT Anonymous Information

17. www.corep.info 17

18. www.corep.info 18 COREP project: Request for testing Common framework for the reporting of the solvency ratio (COREP) by credit institutions To test the COREP XBRL project, institutions are invited to participate by providing test data on a best effort basis. Please visit www.corep.info for details. Who can participate? Any institution that has access to data of banking activities, like for example, credit institutions, consultant firms or any other party interested in participating. How to participate? Institutions should provide test cases using this spreadsheet (www.corep.info/documents/coreptest.zip) and attaching all the relevant documentation associated. No XBRL knowledge is necessary! Collaborating institutions will acquire through their participation in this process: A deeper and better understanding on the COREP reporting framework for the solvency ratio. A chance to provide comments on how the proposed framework works. This may help institutions to provide comments on the CEBS consultation paper. An early knowledge about the availability in their systems of the information that will be required in the future for solvency reporting. The collaboration in this open process will also allow the Institutions to benefit from the experiences, comments, suggestions and questions posed by other members of the banking industry, market participants and XBRL experts. Questions? e-mail to test@corep.info

19. www.corep.info 19 COREP project: team Basic collaborative environment Multinational project team 50 participants from 12 countries on kick-off workshop Different skills Supervisor – business Supervisor – IT experts XBRL practitioners Banks, consultants & providers University Extensive use of Internet tools Website www.corep.info E-mail list & repository on Yahoo Group Conference call

20. www.corep.info 20 COREP project: Acknowledgments (kick-off workshop) NameCountryAffiliationNameCountryAffiliation Adrian AbbottUKFSAIgnacio BoixoESNCB Alejandro SanzESInfodesaIgnacio Hernández-RosESSoft.AG Aliki KazakopouloGRNCBJ. Emilio LabraESProf.Dr. Annica LundbladSEPwCJavier CoboESFujitsu Antonio MencheroESSoft.AGJavier de AndresESProf.Dr. Antonio Sánchez-SerranoESNCBJean-Marie CoudièreFRNCB Arturo LabandaESPwCJesus F. LigerESAzertia Bryce PippertUSAUBmatrixJohan GiertzSEBank César Pérez-ChirinosESNCBJosé Luis F. CuñadoESInfodesa Charles HoffmanUSAUBmatrixJosef MacdonaldUKIASB Cormac McKennaIEFujitsuKatrin SchmehlDENCB Cristina MenaESinormeKlaus BaumannDENCB Daniel D'AmicoUKXBRLKrisztina TamásiHUFSA Daniel HammDENCBMagdalena LlanoESScholar David CastroESAzertiaMichele RomanelliITNCB Delphine MoreauFRNCBOlivier ServaisBEXBRL Dennis PelsNLNCBPablo NavarroESSoft.AG Don InscoeUSAFSAPamela MaggioriITNCB Emilio QuerolESPwCPanagiotis VoulgarisGRNCB Fernando NavarreteESNCBPaolo MilaniITNCB Fernando WagenerESNCBPedro LorcaESProf.Dr. Francesco CanforaITBankPhil WalengaUSAUBmatrix Francisco FloresESScholarRon BaremansNLNCB Frédéric MariéFRNCBVictoria SantillanaESAFI Gustavo GarciaESIBMWalter HamscherUSAXBRL

21. www.corep.info 21 COREP project: Investment (Feb.-May 2005) ConceptNumberUnitsMarket*Cost Secretariat IT developers full time312 months12.000 144.000 - Intl. XBRL advisors310 weeks6.000 60.000 - Business advisors310 weeks3.000 30.000 - Scholars312 months1.000 12.000 - IT support & coordination1050 weeks3.000 150.000 - Attendants on site5050 weeks3.000 150.000 - Attendants off site150260 msg.--- Subtotal staff54 months546.000 - Website & e-mailcorep.info150 - Conference call10 calls100 1.000 300 Meeting rooms220 days1.000 20.000 - Tools, training & develops.50.000 Travels & accommod.75 trips2.000 150.000 Subtotal supplies221.150 300 TOTAL767.150 300 Around three quarter million has been invested until June 2005 by Supervisors and XBRL community, of which 300 by CEBS Secretariat (*) Market cost per unit. Source: PwC

22. www.corep.info 22 COREP implementation: Model Bank Risk Management Operations Counterparties Collateral … Report XBRL--------------- Supervisor Supervision Reports Other data … to XBRL Taxonomy XBRL Errors Internet from XBRL INDUSTRY

23. www.corep.info 23 COREP implementation: Model Bank Risk Management Operations Counterparties Collateral … Report ---------- ---------- ---------- Supervisor IS Supervisory Reports Other data … Presentation, Analysis… Bank operations, controls…. Basel II App. to XBRL from XBRL Basel II App. Report ---------- ---------- ---------- File Transfer (National) COREP XBRL (Europe) COREP XBRL (National) Errors Internet XBRL implementation XBRL core Basel II Didactic model for explanatory purposes only

24. www.corep.info 24 COREP implementation: Banks Bank 2 Banking Supervisor country A Banking Supervisor country B Bank 1 Reports XBRL Basel II IFRS XBRL reports can be used for Basel II as well as for IFRS XBRL reports are also useful interchanging information between supervisors

25. www.corep.info 25 COREP implementation: Banks Bank 1 International Bank ASP provider Banking Supervisor Stock Ex. Supervisor Country Z Supervisor Bank 2 Bank 3 Bank n Reports XBRL Basel II IFRS Multiple implementation approaches: Small banks may use Application Service Provider -ASP- model, outsourcing technical complexity Banks may report all to all the Supervisors: Basel II & IFRS, Banking & Stock Exchange… International Banks may reduce supervisory burden when reporting to different countries

26. www.corep.info 26 COREP implementation: Simple The Bank of Spain is offering as help to the Credit Institutions a converter to XBRL

27. www.corep.info 27 COREP implementation: Complex Access Channels Orchestration / Integrator Infrastructure Services Logs ServicesReports GenerationDirectory Services … Integrated Services Reports, Transformation, Analysis, Validation, Storage … Messages Treatment Connectors, Mappers, Validation, Routers, etc. Services of Security Contents Management Application Services Commercial Packages … Complex Information System example (Bank of Spain) Clients HOST Data warehouse Persistence of data INFORMATION BUS PREPARE TECHNICAL SOLUTION Define & implement the logical architecture XBRL added here!

28. www.corep.info 28 COREP Next Steps Where we are now Taxonomies Stable release on time: May 2005 Reviewed release stable for the summer Instances: Examples published for the industry Infrastructure: Operative

29. www.corep.info 29 COREP Next Steps Maintenance: Business (Bank comments) & Technical (dimensions) Ownership: CEBS Secretariat Intellectual Property License model: XRBL Intl. Options: Creative Commons, GNU, others… Timetable? Business area developments (MKR templates already done) XBRL Standards developments Updates to taxonomy contents

30. www.corep.info 30 COREP Next steps: Releases 05-06-0305-06-2805-11-071Q 200505-07-3105-09-15 Release 0.5 Release 1.0 Release 0.7 Release 0.6 Steering Committee European Workshop Dimensions: Approved COREP: Published Vendors involvement Dimensions: Public draft

31. www.corep.info 31 COREP Next steps: Schedule June Dimension Specification: Public draft (June 28) New definitions impacting more than 20% of current templates Preparing documentation for vendors Interface specifications & implementation working group to continue. July Release 0.6 published at www.corep.info Vendors upgrading tools with stable technology Evaluate impact of new business definitions August - Preparing Workshop materials September - Workshop with XBRL in Europe October – Release draft customisations for 3 countries (NL…?) November Final Dimension Specification (Tokyo, Nov. 7) Release 0.7 Target for a working pilot December – not much 1Q 2006 - CEBS publish final templates. RELEASE 1.0

32. www.corep.info 32 COREP Next steps External Influences, cont. NL - Wants templates operational by 1 July 2006. Means some customisation for Dutch banking Assume existing IT infrastructure can be leveraged Wants final Dutch plan ready 1 October FR – Q1 2007 – able to receive Distinctions between Standardised, IRB, Advanced approaches can impact timing Impact of additional QIS 4, QIS 5 surveys?

33. www.corep.info 33 COREP Next steps Additional Considerations Assume it takes 1 year to implement technically in any supervisor Oct 2005 – target for finalising COREP 1Half 2006 – nothing much happening 2Half 2006 – earliest data collection 1Half 2007 – able to receive for SA, IRB 1Half 2008 – advanced approach

34. www.corep.info 34 COREP Next steps Steps to Completion 1/3 XBRL International operating plan does have the dimension requirements at public working draft stage in June, with the specification following shortly thereafter. It is a top priority and has the total support of consortium leadership and the attention of all key vendors. Calculations, validations and Dimensions are necessary. Business validation of concepts and their relationships to each other Need for external commentary on CP04 templates and incorporate into templates. Insufficient input from banks about test cases Filling the templates is difficult (it seems) Requirements finalisation with respect to modelling needs

35. www.corep.info 35 COREP Next steps Steps to Completion 2/3 Adapting legacy systems to the new data requirements (mapping) Lack of awareness / prioritisation by banks of new data requirements We need to give advice on implementation requirements End user in banks - increase involvement / awareness Need local expertise by coming Autumn (urgency) Need for training to every country Need more test cases and ownership of mapping tool * Need for a live demonstration web site that shows end-to-end process Also documentation on how it works (e.g. links among templates and taxonomies) Need for a project office to own / manage the site, taxonomies, etc.

36. www.corep.info 36 COREP Next steps Steps to Completion 3/3 Templates are now out of synch with taxonomies; need a single source under control Ability to synchronise differences in collection requirements by using COREP taxonomy Planned deliverables need to include roadmaps (and maybe more) for implementation, per stakeholder, in order to support an adoption decision. Requires coordination of roadmaps in terms of timing and milestones

37. www.corep.info 37 COREP Next steps Draft roadmap Host taxonomy Implementation workshop for supervisors Implementation specification Maintain taxonomy Basel II extensions: Other Pillars, other countries

38. www.corep.info 38 COREP Next steps Draft roadmap Roles: Business supervisors, IT supervisors, XBRL consortium (Int'l and National), Banks, Universities... Tasks: Business maintenance, Technical maintenance, Relation with supervisors and European / global XBRL players Other developments: Composition of the project team & relations with FINREP (sharing IT/IS efforts?); Economies of scale in a multinational adoption, Web site, Intellectual Property… Medium term strategy of deliverables and allocation of resources.

39. www.corep.info 39 COREP Next steps Task scheduling the coming months: Involvement of software developers: Documentation, test cases, conformance suite, technical questions Involvement of supervisors and banks: best practices, support, recommendations Preparation of September Workshop, in collaboration with XBRL in Europe Scheduling of the following phases Documentation and possible recommendations

40. www.corep.info 40 COREP Next steps: Options National approach Only the taxonomy is to be maintained, as well as some documentation. Each country will have to deal with all the topics related with the local implementation. Limited coordination/collaboration framework will be in place. No XBRL Europe Jurisdiction in place. Pros: Limited common resources. National organizations are now in place. No need for any change. Cons: Lack of European coordination. If no assistance is provided to other countries; repeated work in each country, no "critical mass" to attract European vendors.

41. www.corep.info 41 COREP Next steps: Options European approach A coordination group is created to ensure the maintenance of the taxonomy and its documentation. Technical information and set of tests are provided to the vendors, when updates are to be implemented. This group provides a European level player to work with the XBRL International Consortium, vendors and third parties. Validation of tools and solutions. Best practices will be developed. Centres of excellence will provide common recommendations. Organization of training and help for countries asking for it. Pros: Complete European solution to be locally implemented. "Export" the solution to other countries as "de facto" standard. Full support of the industry, providing cheap off-the-shelf software, due the large mass of participants. Cons: A stable organization with some resources has to be built or one that is already stable would need some additional resources to take responsibility. How to allocate resources?

42. www.corep.info 42 COREP Next steps: Options Adaptive approach Depending on availability and personal involvement, the actual resources in each moment will deal with the challenges in each moment. Requires a mandate and an identifiable commitment of interested supervisors, may be via a Stakeholders Group Pros: Efficient use of available resources. No CEBS budget. Easy adaptation to changing environment. Cons: Difficult of maintaining scheduling. Limitations when reassigning priorities/tasks. Part of the goals would be under resourced.

43. www.corep.info 43 COREP Next steps: Options Direction Development & Implementation Team ManagerQuality Ctrl. Expert Common Specific Common On Demand Alternatives Proactive Project Office

44. www.corep.info 44 COREP Next steps: Options The project COFINREP (Bank of France) for COREP & FINREP templates, to receive XBRL instances from banks progressively integrate XML/XBRL tools in our information system (for banks, maybe also) economy of scale for supervisors, banks and software industry one technical solution applied for two new business domains with parallel timetables

45. www.corep.info 45 COREP Next steps: Options Challenge The real challenge is not the initial design of the taxonomy; a group of enthusiastic people is ready to carry out this job, as it has been demonstrated. The real challenge is to locally implement a nice design into a fruitful pan-European system.

46. www.corep.info 46 Thanks - Obrigado - Merci - Gracias Danke - Grazie - Ευχαριστίες - Спасибо Pieter Bruegel. The Tower of Babel. 1563