1 Leveraging XBRL in the Banking Industry Internationally Ignacio Boixo – Bank of Spain Luc Dufresne – National Bank of Belgium Yoshiaki Wada - Bank of.

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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

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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





Internal

System

Bank. A

FSA B

Bank C

Secu A

Insu C

Man in the middle: Central Data Base

Bank XSecu A

Insu C




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-mail


Signature e-mail


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


EuroTestSite


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

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Ignacio Boixo

XBRL Network

Committee of European Banking Supervisors

[email protected]

Thank you for your attention

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Luc Dufresne - Head of Microeconomic information Department - National Bank of Belgium


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

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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

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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

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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


Head Office in Tokyo

Head Office in Tokyo

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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.


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?

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Our approaches to the issues (1):


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

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Our approaches to the issues (2):


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

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2003 2004 2005 2006 2007 2008

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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

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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

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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.

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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.

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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

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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)


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%

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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


Operability of X-PortOperability of X-Port


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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


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


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Function of X-Port── 　 Usefulness of pre-validation function by Formula-Link

Function of X-Port── 　 Usefulness of pre-validation function by Formula-Link


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



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




Function of X-Port── 　 Usefulness of error comment function

Function of X-Port── 　 Usefulness of error comment function


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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




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)

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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?”


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Key factors for smooth implementation:

10 ． Some empirical feedback from the BOJ’ Project

Taxonomy with high maintainability

　 User-friendly tool

　 Well-designed reporting scheme

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　 Well-organized project team 46


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11 ． BOJ’s XBRL Team


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


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


Questions - Comments?


END OF PRESENTATION

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1 Leveraging XBRL in the Banking Industry Internationally Ignacio Boixo – Bank of Spain Luc Dufresne – National Bank of Belgium Yoshiaki Wada - Bank of.

Documents

fsa b bank c insu c

fsa b bank c secu

fsa b bank c bank x

fsa b bank c insu c

insu c slide

c common framework xbrl

group b group c group

xbrl group