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1
Leveraging XBRL in the Banking Industry Internationally
Ignacio Boixo – Bank of SpainLuc Dufresne – National Bank of Belgium
Yoshiaki Wada - Bank of Japan Jon Wisnieski – FDIC
1818thth International XBRL Conference International XBRL Conference
2
1818thth International XBRL Conference International XBRL Conference
Leveraging XBRL in the Banking Industry Internationally
European Banking Supervision
Ignacio Boixo – XBRL Network Committee of European Banking Supervisors
Why Financial Information is necessary?
Savings accounts
Information Intermediaries
Business Firms
Flow of
capitalFlow of
information
$ Financial Intermediaries
Regulators of capital markets and financial institutions
Auditors and Accounting regulators
Financial and information flows in a capital market economy.Paul Healy & Krishna Palepu, 2001.
Information Asymmetry, Corporate Disclosure and the Capital Markets: A Review of the Empirical Disclosure Literature
Who is Who in European Banking Supervision
Policy and implementation
measures
Legislation
Level 1: The Commission European Parliament Council
Level 2: European Banking Committee
Convergence and supervisory cooperation
Level 3: Committee ofEuropeanBankingSupervisors
27 Countries
European Banking Supervision. Vision
“While national supervisory authorities are free to decide on the technical transmission specifications to implement the reporting framework, CEBS considers that XBRL can be a helpful tool in constructing a
harmonised European reporting mechanism.
CEBS will therefore develop an XBRL platform and make it available free of charge to national authorities and supervised institutions. XBRL taxonomies will be developed for both the COREP (COmmon REPorting -Basel II-) and FINREP (FINancial REPorting -IFRS-) frameworks.”
Point 4, Cover Note to the Framework for Common Reporting of the New Solvency Ratio
Stack of Interoperability Layers
Agreements Parliament and Int’l Bodies
Bu
siness
Guidelines Banking Supervisors
Data description CEBS COREP&FINEP Networks
Taxonomies CEBS XBRL Network
Info
rmatio
n
Tech
.Best Practices Best Practices Board
Format XBRL Standards Board
Comm. & Security
W3C, ISO…
Interoperability reduces regulatory burden
Reporting before… and after…
Supervisor 1
Supervisor 3
Supervisor 2
Different templates and definitions Common templates and definitionsSeveral formats Single formatDifferent technologies XBRL recommended
Supervisor 1
Supervisor 2
Supervisor 3
XBRL
Group A
Group B
Group C
Group A, B, CCommon
framework
XBRL
Multiple incompatible Flows
Bank. A
FSA B
Bank C
Bank XSecu A
Insu C
Signature e-mailFormat
Signature e-mailFormat
Signature e-mailFormat
Signature e-mailFormat
Signature e-mailFormat
Internal
System
Bank. A
FSA B
Bank C
Secu A
Insu C
Man in the middle: Central Data Base
Bank XSecu A
Insu C
Signature e-mailFormat
Signature e-mailFormat
Signature e-mailFormat
Bank A
FSA B
Bank C
Bank A
FSA B
Bank C
Signature e-mailFormatInternal
System
Bank. A
FSA B
Bank C
Secu A
Insu C
TARGET2 (Real Time Gross Settlement)Format, Signature and Mail by SWIFT
Man in the middle: Full Centralization
Bank X
Signature e-mailFormatSignature e-mailFormat
Internal
System
Secu A
Bank A
FSA B
Bank C
Insu C
Secu A
Bank A
FSA B
Bank C
Insu C
Bank. A
FSA B
Bank C
Secu A
Insu C
TARGET2 Securities (Straight Thru Processing)Format, Signature and Mail by SWIFT
Standards in Motion: Go live!
IFRS & Basel II in EU Banking Supervision2005-2008 period
Bank A
FSA B
Bank C
Bank XSecu A
Insu C
Signature e-mailFormat
Signature e-mail
Signature e-mailFormat
Signature e-mail
Signature e-mailFormat
Internal
System
Bank. A
FSA B
Bank C
Secu A
Insu C
XBRL
Format
Format
National Definitions
National Extensions
National Practices
Standards in Motion: Interoperability
Secu A
Bank A
FSA B
Bank C
Insu C
Bank X
Internal
System
Bank. A
FSA B
Bank C
Secu A
Insu C
Web 2.0
IFRS & Basel II in European SupervisionLong term vision
Signature e-mailFormat
EuroTestSite
Signature e-mailFormat
XBRL
• Uniformed Supervisory Definitions
• Single Set of European Taxonomies
• Taxonomy acknowledgement
• Standards & Best Practices in all the layersDecimals, Rounding, Identification…
Format, Security, E-mail….
• XBRL reference validator
Key Developments
14
1818thth International XBRL Conference International XBRL Conference
Ignacio Boixo
XBRL Network
Committee of European Banking Supervisors
Thank you for your attention
15
Leveraging XBRL in the Banking Industry Internationally
Luc Dufresne - Head of Microeconomic information Department - National Bank of Belgium
1818thth International XBRL Conference International XBRL Conference
Agenda
XBRL in Belgium
The XBRL project of the CBSO
Coordinating initiatives
XBRL Belgium
Non-profit institution founded on 22 November 2004 and became an established jurisdiction in 2006
Hosted by the National Bank of Belgium
Founding members are regulators, public services, accounting and banking bodies
Actual developments in Belgium Running as of today
XBRL regulatory bank reporting in Belgium FINREP and COREP projects
The CBSO project Collect of annual accounts
In progress Federal Public Service Finance
Corporate tax return
Directorate-general Statistics and Economic Information Structural business survey
Legal context of the CBSO project
Gathering and spread
The Central Balance Sheet Office collects annually 340.000 annual accounts from 320.000 companies and publishes the annual accounts as PDF files
Statistical mission
Data from standardized annual accounts are handled to produce accurate data for official bodies (National accounts)
Publication of statistics per activity sector
First phase - Input flow Gathering annual accounts in XBRL as from April 2007 Increase the quality of annual accounts received
Second phase - Output flow Availability of XBRL files for the users Harmonizing the input and output format
Phases of the project
Evaluation of phase 1 - Figures
Annual accounts – Filing medium
0
10
20
30
40
50
60
70
80
90
100
2000 2004 2006 2007 2009 (forecast)
%Floppy
Internet (forecast)
Internet (actual)
Paper
22
Second phase - Users and Needs Users
Regulators (Tax office, Commercial courts)
Statisticians (National accounts, Business survey)
Bank sector (credit risk)
Data analysts
Needs Format and publication speed (Banking sector for credit scoring) Direct availability of XBRL files (Data providers, Regulators)
Output availability
Figures Images XBRL
Since 1984 2001 2009
Format Text file PDF XBRL
InformationOnly quantitative data
Full Full
Elapsed time 1 => 3 weeks 3 days 3 days
Data processing Y N Y
Exhaustiveness Y YNot for accounts filed on paper
XBRL broadening
To broaden the area of XBRL at national level Through collaboration with other regulators to develop
national taxonomies Starting from an operational application Sharing and extending common modules
Building blocks technique
The Tax project - a step forward for XBRL in Belgium
Overview Important step towards a harmonized format among the
Belgian regulators Enhance the transparency of the financial information
Long term objectives Reducing administrative burden for the companies asking
information only once Cutting down on fraud through immediate cross-checks
between tax declaration and annual accounts
Architecture - Building blocks
GCD Taxonomy
Identification data
Value Lists Taxonomy (Extended)
Core Taxonomy
Data Type Taxonomy (Extended)
Common module
Full taxonomy
Abbr taxonomy
NPO Full taxonomy
NPO Abbrtaxonomy
NBB taxonomiesTax taxonomies
NIStaxonomies
27
BOJ’s Experience in implementing XBRL
Yoshiaki Wada Financial Systems and Bank Examination Department
Bank of [email protected]
© 2008 Bank of Japan
Banking Panel at 18th XBRL International ConferenceOctober 16, 2008, Washington DC
Banking Panel at 18th XBRL International ConferenceOctober 16, 2008, Washington DC
28
1. Introduction of the BOJ
TokyoMaebashi
Fukushima
Sendai
Aomori
Kushiro
Sapporo
Hakodate
Akita
Niigata
Matsumoto
KanazawaOkayama
Kobe
MatsueHiroshimaShimonoseki
Kitakyushu
Fukuoka
Nagasaki
KumamotoKagoshima
OitaMatsuyama
Kochi Takamatsu
Osaka
KyotoNagoya
ShizuokaKofu
Yokohama
Naha
Central Bank of Japan, established in 1882 32 branches nationwide
© 2008 Bank of Japan
Head Office in Tokyo
Head Office in Tokyo
29
© 2008 Bank of Japan
2 . Monitoring Coverage of Financial Service Institutions
Major Banks
Regional Banks
Shinkin Banks
Foreign Banks
Securities Firms, etc.Bank of Japan
Importance of efficient data gathering scheme
Monitoring data from about 570 FSIs
BOJ covers about 570 FSIs and gathers various daily, weekly, monthly and annual data for monitoring.
© 2008 Bank of Japan
3 . How we implemented XBRL (1)
Three major issues to be solved:Three major issues to be solved:
How to check whether XBRL is suitable for the BOJ’s data-gathering framework?
How to make people aware of the merits of implementing XBRL?
How to let people use XBRL?
30
© 2008 Bank of Japan
Our approaches to the issues (1):
3 . How we implemented XBRL (2)
Step by step approach
Public relations activities
⇒ Open seminar on XBRL, introduction of BOJ’s XBRL project to the public through the media
⇒ From a small-scale closed trial to a large-scale open test⇒ From a one-time trial to cycle tests over several months
31
© 2008 Bank of Japan
Our approaches to the issues (2):
4 . How we implemented XBRL (3)
Feedback of the latest technical advancements to the users
⇒ Adoption of the latest version of XBRL with Formula-Link
Low cost and easy operational scheme
⇒ Development of tool for easily generating XBRL data and sharing it with FSIs free of charge
32
2003 2004 2005 2006 2007 2008
33
© 2008 Bank of Japan
Preparation for testing Tool and taxonomy
development
Live Use of XBRL
・ Release of the Monthly B/S Taxonomy on banking a/c・ Release of the Taxonomy Setting Tool・ Release of the Monthly B/S Taxonomy on trust a/c・ Release of the Monthly Lending Rate Report Taxonomy ・ Release of the Deposit Data Report Taxonomy
・ Release of the Monthly B/S Taxonomy on banking a/c・ Release of the Taxonomy Setting Tool・ Release of the Monthly B/S Taxonomy on trust a/c・ Release of the Monthly Lending Rate Report Taxonomy ・ Release of the Deposit Data Report Taxonomy
5 . Project history
Three-phase test
Feb 2006
34
© 2008 Bank of Japan
6 . The BOJ’s XBRL based reporting scheme
②D/L of necessary taxonomy set
⑤ D/L of XBRL data
① U/L of taxonomy set to the library
FSIs
XBRL③ data creation and validation
Data creation tool
Error-free data files
BOJ
Error-free data files
IP-VPN
Database Database
Post data validation
Taxonomy library
Taxonomy setting tool
Taxo2Ta xo3
Taxo1 Taxo2
Earlier data release for BOJ’s users
④ U/L of XBRL data
Select the taxonomy according to the report type
Develop the taxonomy set according to the report type
Excel XBRL
Check for errors using the function of Formula-Link and correct the file
XBRLXBRL
35
© 2007 Bank of Japan
7 . Review of the last 30 months of live use (1)
⇒ Our XBRL tool has worked without fatal problems.
1. No down time
⇒ The reliability of the tool and availability of the total reporting workflow were confirmed.
2 . All FSIs submitted monthly B/S data in XBRL format ⇒ Although XBRL was not mandatory in our reporting scheme,
all FSIs submitted data in XBRL format voluntarily.
⇒ FSI’s degree of recognition of the new reporting scheme increased steadily.
36
© 2007 Bank of Japan
7 . Review of the last 30 months of live use (2)
3 . Revision and re-distribution of the current taxonomy and the release of the new range of taxonomy
⇒ The taxonomies have been revised several times due to revisions to Japanese company law or the requirement for new data.
⇒ A new range of taxonomies, such as those for monthly B/S of trust accounts and lending rate reports, was released.
4 . Enhancement of efficiency of FSIs’ reporting work and the BOJ’s data processing
⇒ Decrease in manpower required for data reporting in the FSIs and for database operation in the BOJ
⇒ Earlier release of the accurate data to the BOJ’s data users.
37
© 2007 Bank of Japan
Changes of the BOJ’s business flow on the Monthly B/S data processing
Report deadline
day X X+1 X+2~4 X+5 X+6day X X+1
X+5 X+6
Preparation of data U/L
Data U/L and validation within DB
Data processing within DB
Data release for BOJ users
Error correction
Data validation by XBRL, prior to data submission
Reduction of post validation costReduction of post validation cost
Data validation by XBRL, prior to data submission
Reduction of post-validation cost
Old Flow
Early data release( 2 to 4 days)
Short cut!
New Flow
8 . Increased efficiency in the data reporting scheme (1)
0
20
40
60
80
100
120
140
160
180
April May J une J uly Aug. Sept. Oct. Nov. Dec. J an. Feb. Mar.
(FY2
004=
100) 2004FY
2005FY2006FY2007FY2008FY
38
© 2008 Bank of Japan
Reduction of the required part-time manpower in the BOJ’s database operation team
Reduction of the required part-time manpower in the BOJ’s database operation team
XBRL went live (Feb. 2006)
8 . Example of enhancement of reporting efficiency(2)
© 2008 Bank of Japan
9 . Users’ evaluation of BOJ’s XBRL tools (1)
・ Results of questionnaire about the usability of BOJ’s XBRL tools and reporting scheme, August 2008
・ Results of questionnaire about the usability of BOJ’s XBRL tools and reporting scheme, August 2008
Number of samples
Number of responders
Response rate
Domestically licensed banks,
such as major banks, local
banks
150 138 92.0%
Foreign banks 60 55 91.7%
Shinkin banks 267 237 88.8%
Total 477 430 90.2%
39
8% 10%
78%
4%0% Easy
Somewhat easy
Average
Somewhat difficult
Difficult
6%
7%
83%
4%
0%
12%
15%
61%
12% 0% 9%
11%
77%
3%
0%
All banks
Domestically licensedbanks Foreign banks Shinkin banks
© 2008 Bank of Japan
Operability of X-PortOperability of X-Port
9 . Users’ evaluation of BOJ’s XBRL tools (2)
40
2% 14%
69%
8% 7% Slow
Somewhat slow
Average
Somewhat fast
Fast
2% 19%
68%
5%
6%3% 12%
65%
5%
15%1% 10%
71%
12%
6%
All banks
Domestically licensedbanks
Foreign banks Shinkin banks
© 2008 Bank of Japan
Performance of X-Port── Total speed of data reading, transforming from Excel to
XBRL and data-validation by Formula-Link
Performance of X-Port── Total speed of data reading, transforming from Excel to
XBRL and data-validation by Formula-Link
9 . Users’ evaluation of BOJ’s XBRL tools (3)
41
© 2008 Bank of Japan
Function of X-Port── Usefulness of pre-validation function by Formula-Link
Function of X-Port── Usefulness of pre-validation function by Formula-Link
9 . Users’ evaluation of BOJ’s XBRL tools (4)
3%
32%
34%
31%
0%Useless
Somewhat useless
Average
Somewhat useful
Very useful
1%
5%
37%
35%
22%
0%
2%
24%
38%
36%
0%
1%
30%
33%
36%
All banks
Domestically licensedbanks
Foreign banks Shinkin banks
42
42%
34%
20%1%
3%
Useless
Somewhat useless
Average
Somewhat useful
Very useful
1%
4%
46%33%
16%
0%
3%
38%
35%
24%43%
34%
22%0%
1%
All banks
Domestically licensedbanks
Foreign banks Shinkin banks
© 2008 Bank of Japan
Function of X-Port── Usefulness of error comment function
Function of X-Port── Usefulness of error comment function
9 . Users’ evaluation of BOJ’s XBRL tools (5)
43
6%17%
58%
13% 6%No contributionSlight contoributionAverageGood contributionExcellent contribution
10%
21%
54%
11% 4%2%
6%
54%26%
12% 5% 17%
60%
12%
6%
All banks
Domestically licensedbanks
Foreign banks Shinkin banks
© 2008 Bank of Japan
Contribution of X-Port for improving the data reporting work flow in FSIs
Contribution of X-Port for improving the data reporting work flow in FSIs
9. Users’ evaluation of BOJ’s XBRL tools (6)
44
© 2008 Bank of Japan
Other commentsOther comments
・ There was no request to stop XBRL reporting. In fact, some banks want the range of XBRL based reporting to be expanded.
── “ Since XBRL seems to be becoming a major reporting scheme in society,
please expand the range of BOJ’s XBRL reporting”
── “ Data validation is very useful – we hope it is adopted for other reports”
・ There was no request to stop XBRL reporting. In fact, some banks want the range of XBRL based reporting to be expanded.
── “ Since XBRL seems to be becoming a major reporting scheme in society,
please expand the range of BOJ’s XBRL reporting”
── “ Data validation is very useful – we hope it is adopted for other reports”
・ Some FSIs want a one-stop reporting scheme to reduce the reporting burden.
── “ Why is integrated reporting not possible? Why should the same information
be submitted in Excel, XML and XBRL to different authorities?”
・ Some FSIs want a one-stop reporting scheme to reduce the reporting burden.
── “ Why is integrated reporting not possible? Why should the same information
be submitted in Excel, XML and XBRL to different authorities?”
・ Many FSIs require functional linkage between X-Port and IP-VPN system.
── “ Could the data compression function of X-Port be integrated with the
encryption function of IP-VPN?”
・ Many FSIs require functional linkage between X-Port and IP-VPN system.
── “ Could the data compression function of X-Port be integrated with the
encryption function of IP-VPN?”
9 . Users’ evaluation of BOJ’s XBRL tools (7)
45
© 2008 Bank of Japan
Key factors for smooth implementation:
10 . Some empirical feedback from the BOJ’ Project
Taxonomy with high maintainability
User-friendly tool
Well-designed reporting scheme
46
Well-organized project team 46
© 2008 Bank of Japan
47
11 . BOJ’s XBRL Team
© 2008 Bank of Japan
All-Star Cast of my Data Center Section !
Jon WisnieskiSenior Information Systems
Specialist
Business Case for Formulas
Agenda
XBRL Application Formula Benefits Quality Standards and Business and Performance Metrics
XBRL Application
Three banking agencies developed the Central Data Repository (CDR) Used XBRL to define and transport data Data receipt Data validation Storage Distribution
CDR launched on October 1, 2005 Key policy change ~ pre-validation using XBRL Very Successful implementation
Call Reporting Before XBRL
Validation routines and formulas stored in and processed by two systems (FRB, FDIC)
Banks submit data after some minimal checks in their software - inconsistencies between preparation software packages
Software vendors receive Call Report metadata from Excel, PDF, and Word documents – cut and paste into their software
Agency analysts would check data quality once files had been submitted and contact bankers with any questions – often 1-3 weeks after initial submission
Call Reporting After XBRL
FFIEC developed the XBRL-based CDR with Unisys Corporation as systems integrator
Metadata stored in XBRL taxonomy files now available to anyone The same taxonomy files that contain validation criteria the agencies
use in the CDR are used in Call Report software vendor packages Banks are required to check the quality of their data before
submitting Agencies do not accept data with quality problems Quality assurance work is done by reporters up front, when it is more
efficient Agencies receive high quality data sooner—lower cost
Benefits
… and therefore powerful A standard for expressing:
the data to be exchanged the instructions for providing the data an interface or form or presentation the validation criteria for checking the
quality of the data
XBRL is Expressive
Quality Standards
What are they? Formulas that are expressed in XBRL
and shared with stakeholders Evaluate to either ‘true’ or ‘false’ Check a relationship that either must
be true – or – that, if true, point to an anomaly to be
researched
Quality Standards
Validity – equations that must hold true or the data is inaccurate
Quality – data relationships that help identify anomalies
Reportability – identify what financial concepts an entity should submit based on their structural or financial characteristics
Business and Performance Metrics
What are they? Modify data by (+, -, /, *) Apply functions (annualize, %change) Consistently applied across
Data Industry Comparability
Business and Performance Metrics
Capital Adequacy Asset Quality Earnings Liquidity Growth Rates Industry Standards
Regulatory International ~ Basel II
Results—Everyone Sees the Same Data!
Taxonomy = authoritative source, used by all Rules for what data to report Data quality standards
Communication between all parties improved Banking agencies Call Report Software Vendors Financial institutions
Increased Data Transparency
Back to Contents
Business and Performance Metrics
Questions - Comments?
© 2008 Bank of Japan
END OF PRESENTATION
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