Extensibility of COREPExtensibility of COREP and and

Compatibility between Basel II Compatibility between Basel II agreement and the future agreement and the future

DirectiveDirectiveAn external analysis.An external analysis.

Francisco Flores MuñozFrancisco Flores MuñozUniversity of Huelva.University of Huelva.

QuestionsQuestions

Is possible to link COREP with Basel II Is possible to link COREP with Basel II agreement text? How the compatibility agreement text? How the compatibility is?is?Is possible to more completely extend Is possible to more completely extend COREP to Pillar II and III?COREP to Pillar II and III?Is possible to extend COREP to other Is possible to extend COREP to other geographic spaces? geographic spaces?

Is possible to link COREP with Basel II Is possible to link COREP with Basel II agreement text? How the compatibility is?agreement text? How the compatibility is?

Hypothesis:Hypothesis:We think that COREP could be easely extended We think that COREP could be easely extended

to Pillar II and III (adding more templates to to Pillar II and III (adding more templates to the current set), and to other geographic the current set), and to other geographic spaces (linking legal references in templates spaces (linking legal references in templates to Basel II agreement text).to Basel II agreement text).

We think that a strong relationship exists We think that a strong relationship exists between Basel II agreement and the future between Basel II agreement and the future European Directive, which supports the link European Directive, which supports the link between COREP, Basel II Pillars and other between COREP, Basel II Pillars and other geografic frameworks.geografic frameworks.

Extensibility. Legal aspects.Extensibility. Legal aspects.

Basel II agreement

Future Directive

COREP

The legal structure permits the link between COREP and Basel text.

To other Basel PillarsTo other Basel Pillars

COREP TemplatesToday

Pillar I

Pillar II

Pillar III

Future Templates

To other geografic frameworksTo other geografic frameworks

European Union

European DirectiveCOREP Templates

Basel II AgreementNew Templates

Other countries

ObjetivesObjetives

Make a direct comparison between legal Make a direct comparison between legal references of a COREP template and the references of a COREP template and the Basel II agreement text.Basel II agreement text.

Propose a set of new templates to be Propose a set of new templates to be added to COREP´s one, including Pillars II added to COREP´s one, including Pillars II and III key aspects.and III key aspects.

Comparison between legal referencesComparison between legal references

We have selected two template, OPR LOSS We have selected two template, OPR LOSS and OTH 3 AFF and we have tried to and OTH 3 AFF and we have tried to relate each element with a reference in relate each element with a reference in Basel II agreement.Basel II agreement.

The result and conclusions are the following:The result and conclusions are the following:

OPR LOSS TemplateOPR LOSS Template

OTH 3 AFF Template (I)OTH 3 AFF Template (I)

OTH 3 AFF Template (II)OTH 3 AFF Template (II)

Preliminar ConclusionsPreliminar Conclusions

We could link the templates with Basel II We could link the templates with Basel II text.text.

We should make any conciliations.We should make any conciliations.We could add more templates (adding We could add more templates (adding

more measures and dimensions and using more measures and dimensions and using the existing set) to complete the disclosing the existing set) to complete the disclosing requirements of Pillars II and IIIrequirements of Pillars II and III