Diapositiva 1

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Playing several roles today

• As Director General of Regulation of the Bank of
  Spain
• As Chair of the Committee of European Banking
  Supervisors (CEBS)
• As Chair of XBRL-Spain

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The importance of XBRL

• Efficient markets depend on information
• A market is efficient if prices reflect all
  information on underlying asset(s)
• But information is costly
• To generate, transmit and use
• XBRL promotes efficiency of information flows
• For both the generators and users of financial
  information
• This, in turn, promotes greater efficiency and
  efffectiveness for the system as a whole
• Including through pricing that is based on more
  accurate and timely information and therefore
  that better reflects underlying realities
• Public policy aspect of XBRL
• Accuracy
• Reliability
• Speed

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CEBS

• What is CEBS?
• A high-level committee of representatives from
  the banking supervisory authorities and central
  banks of the European Union
• What are its tasks?
• To advise the European Commission on banking
  policy issues, in particular for the preparation
  of draft measures for the implementation of EU
  legislation
• To foster consistent day to day implementation
  and application of Community legislation by
  issuing guidelines, recommendations and standards
• To promote supervisory co-operation and provide
  for the exchange of supervisory information

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CEBS and initiatives on reporting

• Current situation 25 countries asking for
  different information - different definitions
  different IT systems incompatible formats
• CEBS has taken two main initiatives to promote
  common reporting requirements
• 1. Common reporting of the solvency ratio
  (COREP) final publication 13 January 2006
• 2. Common reporting for financial data (FINREP)
  final publication 16 December 2005
• These initiatives take advantage of the fact that
  Basel II and IFRS will require all supervisors to
  change their reporting requirements
• And XBRL provides the right technology at the
  exact moment it is needed most!
• CEBS has decided in both initiatives to promote
  the use of XBRL with the development of two
  taxonomies.

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Why?

• Expected benefits
• Level playing field common reporting framework
  across the EU
• Reducing administrative costs for banking groups
  (mainly for cross-border banks)
• Removal of potential obstacles to financial
  market integration
• Easier exchanges of information between
  supervisors
• Increased cost effectiveness of supervisory
  activities in the EU
• More flexible framework across countries and
  over time
• Improving the quality of information flows from
  reporting entities

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Advantages of implementing XBRL in EU (I)

• XBRL will enable banks to fulfil the reporting
  requirements of supervisory authorities across
  the EU with a single IT standard
• The costs of implementing EU common reporting in
  cross-border groups will be reduced
• Less administrative and implementation costs
• Small banks may benefit from a free standard like
  XBRL and from the economies of scale derived from
  the development of the XBRL taxonomy by CEBS
• Less implementation costs
• Also, supervisors may benefit from economies of
  scale
• Increased cost effectiveness of supervisory
  activities due the use of IT STANDARDS

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Advantages of implementing XBRL in EU (II)

• XBRL standard will facilitate the transmission of
  the common definitions expressed in common EU
  reporting
• Level playing field and removal of obstacles for
  financial market integration
• In short, the compatibility of formats, contents
  and IT systems supported by XBRL will allow
  supervisors to collect information on a
  decentralized way, while having all the
  functionalities as if a centralized data base
  were in place and benefiting from additional
  flexibility

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European Law Basel II implementation
Basel II
European Law 9X,XX Basel II compatible
Directives 2000/12 93/6
Transposition into national Legislation
Country 1
Country 3
Country 2
Country 25
National Regulation
Auth. 1
Auth. 2
Auth. 3
Auth. 25
National Implementation
Report 2
Report 1 ------------------------------------
Report 3 -----------------------------------------
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XBRL challenge!
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XBRL Window of opportunity
2004
2003
2005
2006
2007
2002
2008
Too late
Operational Basel II IFRS/IAS
Today!
Too early
Establishing CEBS XBRL EU
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XBRL in Spain

• Spains involvement
• Spain became an XBRL jurisdiction in 2004
• XBRL España Association is chaired by Banco de
  España (Central Bank and Banking Supervisory
  Authority of Spain). Public interest aspect of
  XBRL
• Aim of XBRL España
• To foster the introduction, adoption and
  development, both at a national and international
  level, of the XBRL language, for the purpose of
  unifying the standards applicable to financial
  and business reporting
• Ultimate goal
• Facilitate the integration of the Spanish
  European Financial Markets

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Activities of XBRL-Spain

• Quick increase in the number of members in XBRL
  Spain, up to 40
• Cooperation between different regulatory agencies
  is one of the main targets
• A number of XBRL taxonomies has been completed
• XBRL has been implemented and now is in use
• There has been a strong collaboration with other
  international taxonomies (i.e., COREP, IFRS-GP)

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Projects of Bank of Spain

• SIIF receiving public financial statements in
  XBRL
• So far, only the main groups are included in this
  project
• During 2006, the rest of the banking groups will
  join the project
• Banks may re-use the information to report to
  other agencies (i.e. Securities Commission)

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Projects of Bank of Spain

• Spain COREP receiving capital information based
  on new CRD (EUs Basel II).
• Leading the XBRL project since the beginning.
• Developing a national project during 2006, in
  order to start receiving information in 2007
• Cross-border Spanish banks may report the same
  information to other supervisory agencies in EU

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Projects of Bank of Spain

• Spain FINREP receiving supervisory reporting in
  XBRL
• Implementing a harmonised financial reporting
  framework in EU
• Participating in the development of the FINREP
  taxonomy
• To be developed during 2007

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Other XBRL projects in Spain

• General Identification Data
• Setting a common taxonomy to identify the
  reporting entity
• General Accounting Plan
• To allow the reporting of non-financial companies
  according to local GAAP
• Listed companies information
• Developed by the Spanish securities commission

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CONCLUSIONS

• One of the strengths of XBRL is that it only
  needs a small critical mass
• From the Spanish perspective, even just the Banco
  de España initiatives for banks reporting
  represent a huge step forward
• But if we take all of the different initiatives
  together, e.g.
• In Spain
• In the EU (CEBS)
• And more further afield (e.g. SEC initiatives)
• We have a hugely potent tool
• Template reporting is dead
• Welcome to the era of tag reporting!

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• Thank you for your attention