IX European Banking Supervisors XBRL Workshop

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Banque de FranceSecrétariat général de la
Commission bancaire

• IX European Banking Supervisors XBRL Workshop
• SURFI Unified FInancial Reporting System

Paris, October 1st, 2008 Jean-Luc Menda Deputy
Director Sylviane Delarue Head of IT
department Commission bancaire Banque de France

SGCB
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Presentation overview

• 1. Commission bancaire IT strategy
• 2. Focus on SURFI
• - strategic and functional aspects
• - building of the taxonomies
• - the present BAFI system
• - SURFI IT project

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1. Commission bancaire IT strategy

• Main IT strategy elements
• Implement the new COREP and FINREP reports in
  compliance with the European harmonized framework
  
• Follow the CEBS recommendation to adopt XBRL in
  order to foster harmonization
• Change our reporting framework, promote
  harmonization and streamlining, launch the SURFI
  project
• Modernize our banks rating system and IT studies
  system

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1. Commission bancaire IT strategy

• In this framework, progressive, but complete
  change of our reporting system
• in 3 stages
• COFINREP project implementing COREP et FINREP
  specifications beginning of 2006 mid 2008
• MODEC project modernizing the civil status data
  gathering June 2007 1st semester 2010
• SURFI project modernizing and streamlining
  regulatory data gathering April 2008 June
  2010

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1. Commission bancaire IT strategy
MODEC project
SURFI project

COFINREP project
MODEC project
Go live
SURFI project v.1
SURFI project v.2
SURFI Business study Banking industry consultation
Taxonomies building
Financial Agents Information System Upgrade
Beginning of 2006
Mid-2007
June 2010
End of 2008 SURFI Taxonomy finalization
April 2008
Dec. 2010
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1. Commission bancaire IT strategy

• COFINREP project
• It permitted the implementation of the Basel II
  and IFRS impacts on the regulatory reports
• following the CEBS recommandations about the
  use of the XBRL standard for harmonized European
  COREP et FINREP reports.
• Launched in 1993, the present BAFI system, using
  a proprietary data format, couldnt be upgraded
  to reach the new specifications.
• A finished project
• New functionalities since September, dedicated to
  the supervision staff (e.g. specific reports)
• Next improvment the implementation of the
  tolerance margin .

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1. Commission bancaire IT strategy

• MODEC project
• Offering to the banking industry a
  state-of-the-art interactive software dedicated
  to civil status processes
• Being able to get live data transmission from
  banks and give them feedback
• Taking into account the new European regulatory
  requirements
• integrate new categories of banks, in
  compliance with european directives,
• and reinforce the disclosure (the directive on
  Systems of payment requires the creation of
  an on-line registered bank database  
• Allowing the 80 IT systems of BoF to have an
  easy real-time acces to this system of reference
  (WEB site, WEB services, WEBSPHERE, ORACLE)
• End of the project 1st semester 2010 (this
  system of reference is necessary for SURFI)

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2. SURFI Unified Financial Reporting System

• Present data collection system, BAFI
• Reporting entities MFIs according to the
  French banking law, id. broad definition -, and
  investment firms
• Coverage data for statistical as well as
  prudential purposes, but BoP data partially out
  of the scope
• Same database, but limited harmonization of
  concepts and reporting formats, generating double
  collection of data
• On the technical side, database system based on a
  proprietary system developed in 1993, therefore
  somewhat mature

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2. SURFI Unified Financial Reporting System

• Modernizing the reporting system
• Result of a discussion process with the banking
  industry following the introduction of COREP and
  FINREP
• The industry requested
• a significant reduction of the reporting burden
• the elimination of double collection of data for
  supervisory and statistical purposes
• a better coordination in the definition of new
  reporting requirements between Banque de France
  departments

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2. SURFI Unified Financial Reporting System

• Launched in June 2007, the main objectives of the
  project
• Harmonize data collection for supervisory and
  statistical purposes, in eliminating double
  collection of data
• Alleviate the reporting burden through the
  streamlining of the entire present reporting
  system
• Take fully into account the ECB statistical
  revision package and articulate our own schedule
• Switch from a template centered approach to a
  data centrix approach, capitalizing on our XBRL
  experience for COREP and FINREP.

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2. SURFI Unified Financial Reporting System

• Simplified scope of the project
• (Tier 1) French Gaaps
• ( Tier 2) French Gaaps
• (Tier 3) IFRS or French Gaaps

Monetary statistics France (1)
Prudential data France branches abroad social
accounts (2)
Consolidated Prudential data (3)
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2. SURFI Unified Financial Reporting System

• Main results in terms of harmonization
• Broad harmonization between tier 1 and tier 2
  data, relying on the same accounting standards
  (French Gaaps)
• Limited between tiers 1 and 2 on the one side,
  and consolidated data established either on IFRS
  or French Gaaps, depending on the institution

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2. SURFI Unified Financial Reporting System

• Potential links between counterpart breakdowns
• Find bridges between the different reporting
  schemes (ESA95, FINREP and COREP)
• Make it easier for MFIs to manage counterparty
  breakdowns
• Build a table allowing to bridge ESA95
  counterpart sectors with SURFI counterparts, as
  well as COREP and FINREP

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2. SURFI Unified Financial Reporting System

• Other achievements of the project
• Elimination of double collection of data every
  data will be sent once either for statistical or
  prudential purpose
• A significant reduction in the volume of data
• A more risk-based oriented system consisting of
  core information sent by every institution,
  complemented by information sent depending on the
  level of activity in different areas (thresholds
  for interbank operations, financial instruments,
  credit)
• Ready to start building the taxonomy

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Presentation overview

• Strategical axis in terms of operational IT
  objectives.
• IS Modernization in 3 stages
• Focus on SURFI
• - strategic and functional aspects
• - building of the taxonomies
• - The present BAFI system
• - SURFI IT project

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Focus on SURFI building of the taxonomies
1st stage

• Design of the SURFI future templates revised by
  three working groups almost finalized.
• the presentation rules have been determined
• regarding the format and the header, use of a
  specific colour code to identify dimension names
  and their values, facts, forbidden data,
  presentation labels.
• the elements and dimensions codification will be
  implemented at the same time.
• Templates validation by Monetary departments,
  banking commission, ultramarine departments in
  progress.

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Focus on SURFI building of the taxonomies -
ex modèle 8080
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Focus on SURFI building of the taxonomies
2nd stage

• implementation of the working-out principles of
  the SURFI taxonomy building of primary
  taxonomies and dimensions.
• The primary taxonomies elements come from
• elements from the  accounting class data tree 
  
• other elements resulting from the templates
• each element has its own concept name, label,
  hierarchical links with other elements,
  regulatory references and, if necessary,
  calculation links.

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Focus on SURFI building of the taxonomies
data logical tree
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Focus on SURFI building of the taxonomies
2nd stage

• the XBRL element name will be determined from
  the element labels belonging to the data tree or
  the templates.
• the normalisation of the template presentation
  and the data tree elements will make easier the
  automatic initialization of most of the future
  taxonomies via a purpose-built tool.
• SURFI templates naming rules are under
  validation.
• The templates will be grouped by activity blocks
  (associated to a threshold or a theme).

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Focus on SURFI building of the taxonomies
3rd stage

• the dimensions taxonomies , their values and
  their hierarchical order are being elaborated.
• for each template design of the hypercubes.
• choice of a a modularized model of taxonomy
  architecture (FINREP 1.3).

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Focus on SURFI building of the taxonomies

• Some figures about SURFI Taxonomy
• 64 templates (some of them with sub templates)
• 900 elements from the data logical tree
• 900 elements outside the data logical tree
• 15 dimensions (until 6 depth levels)

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Focus on SURFI building of the taxonomies
road map

• end of September 2008 templates finalization.
• end of November 2008 taxonomy building.
• December 2008 validation.
• end of December 2008 publication of a first
  draft version.

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Remaining tasks

• Internal checkings design,
• ECB requirements to integrate,
• New regulations writing (BC and BoF),
• Recovery and/or re using of the BAFI data

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Current situation of IT system
BAFI
Financial Institution Information System

Accreditation
Prudential and accounting Reporting
Inside applications CB/BDF
Bâle II
SIGNECB
COREP Instances
Data Control and management
IFRS
Data mining
FINREP Instances
XBRL Taxonomy management
Accreditation
COFINREP
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Legacy system BAFI

• BAFI in few figures
• 840 end-users (510 in headquarters departments,
  330 in the subsidiaries)
• 49.000 queries/day, i.e. 2 per second,
• 550 night batch prosesses,
• 800 day batch processes,
• 100 file transfers (input ou output) per day,
• 31 incidents per month,
• 1.400 programs.

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Legacy system BAFI

• Civil status data
• 910 credit institutions (banks and financial
  firms)
• 156 investment firms
• Accounting data
• 23 000 000 lines directly available
• 455 tables
• 687 screens or reports
• 430 processing batches

Source SIGD -Banque de France - février 2005
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Focus on SURFI - IT part of the project

• IT project milestones
• Launch of the project beginning of June 2008
• Requirements document created during the summer
  in order to launch rapidly an open tender
• Opening of the tests platform for the external
  actors in january 2010
• Opening of the 1st version of the SURFI portal in
  July 2010
• Opening of the 2nd version of the SURFI portal in
  December 2010

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Focus on SURFI - IT part of the project
Business Controls storage
Feedback Specific messages

• Structure Controls

• Taxonomies
• Reference system

Files system
Taxonomies management
validated data

• Taxonomy controls anomalies management

• Design, VersioningValidation

• Specific controls, validation rules

• Storage,

DOD-SDESS
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Scope of the project main functionnalities

• Reporting duties defining and remittance
  monitoring
• Who, what and when
• Mistakes or late data sending
• Exceptions management
• Main issue
• Only one taxonomy but
• different rules and periods of remittances
• Different activity blocks of facts expected
  varying by threshold or a theme.

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Scope of the project main functionnalities

• 1st and 2nd level controls
• Structure format, arithmetic accountancy
  controls.
• Main controls identifier, taxonomies,
  inter-taxonomies et inter-dates, tolerance
  margins, duplicate and missing facts.
• Main issues
• Formulae specifications arent ready yet
• Tools havent been validated either
• Specific controls will be inevitable
• From partial instances and aggregated instances

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Scope of the project main functionnalities

• Storage
• In files system or in data base system the
  choice hasnt been made
• Main issue
• Performance
• design, calculation and visualization of simple
  and complex reportings and synthesis
• Main issue
• With XBRL tools or with others tools (BO, SAS)
  the choice hasnt been made

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Scope of the project others functionnalities

• All the functions of an up-to-date IT system
• Static data management
• Taxonomies management
• Main issue lack of versionning specifications
• Habilitation management
• Easy navigation in the IT software
• Exporting to other systems
• In XBRL
• In flat files
• To EXCEL spreadsheets

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Main orientations

• Collecting partial data in order to take into
  account the different remittance periods.
• This possibility will imply aggregating
  internally the final and unique instance for a
  date and for a financial institution.
• Use of external taxonomies (e.g. COREP Host)
  possible
• Small credit firms will be able to type their
  data into specific internet pages (instead of
  sending an XBRL file)
• The retrieval of COFINREP data must be done .

09/09/2008
Comité de pilotage SURFI
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Main orientations

• All the technical components of chosen solution
  have to be known and used into the existing or
  planned production lines of BOF.
• The total compatibility with XBRL 2.1. and
  dimensions 1.0 specifications is compusory.The
  road map concerning Formulae, versionning and
  rendering is requiered.
• The data management solution (file system versus
  data base system) will have to be optimized and
  met the BoF requierements, especially in terms of
  complex reporting)
• Preference for an XBRL software package (instead
  of programming a new one)

09/09/2008
Comité de pilotage SURFI
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Banque de FranceSecrétariat général de la
Commission bancaire

• Thank you for your attention !