© 2013 | EBA | European Banking Authority

Technical Standards on supervisory reporting

XBRL UK17 June 2013| London

Meri Rimmanen| EBAWolfgang Strohbach| EBA

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Outline

> Financial supervision in the EU – role of the EBA> Single rulebook and the case for harmonised supervisory data> Technical standards on supervisory reporting – main features> Facilitating implementation of supervisory reporting requirements

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ESRB ESFSEIOPA EBA ESMA

Joint Committee

EU central banks EU supervisors

Macroprudential

Microprudential

European System of Financial Supervision

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Common rulebookMaximum harmonisation

...but proportionate to different financial institutions

EU Co-LegislatorsSectoral Directives

EBA role:provide advice

EBA‘Implementing legislation’

EBA issuing guidelines and recommendations (as before)

Developing draft binding technical standards

EBA regulatory tasks

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Outline

> Financial supervision in the EU – role of the EBA> Single rulebook and the case for harmonised supervisory data> Technical standards on supervisory reporting – main features> Facilitating implementation of supervisory reporting requirements

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Reporting before… and after…

Supervisor 1

Supervisor 3

Supervisor 2

Different data definitions Common data definitions, instructionsSeveral formats Single formatDifferent technologies IT standards

Supervisor 1

Supervisor 2

Supervisor 3

Group A

Group B

Group C

Group A, B, CCommonframework

Technical Standards on supervisory reportingObjective: increase efficiency in reporting systems, enhance data analysis capabilities

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ITS on supervisory reporting - benefitsDirectly applicable>No implementation, or interpretation of the Regulation on national level ensures

common definitions and instructions

Technical translation of reporting requirements> Data point model and XBRL taxonomy > Common validation rules

Truly harmonised supervisory data>Helps supervisors to assess asset quality, risk concentrations, liquidity positions,

conduct peer analysis, analyse risk parameters across institutions>Harmonised definitions, especially on forbearance, non-performing loans and asset

encumbrance significantly enhance identification of potential systemic risks

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The role of EBA – main objectives and tasksMain objectives:

Establishing EU single rule book

Promoting and enhancing quality and consistency of supervision

Reinforcing oversight of cross-border groups

Early warning of upcoming vulnerabilities

Effective early intervention and bank resolution

Main tasks:

Develop binding technical standards, guidelines, recommendations

Promoting common supervisory culture / supervisory practices

Peer group analyses and peer reviewsMonitoring effectiveness colleges

EU-wide risk assessments and stress testsRisk dashboards

Reacting on risk warningsHandling of emergency situations

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EBA oversight tasks – data usage

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Benefits of harmonised data

>Data from banks across the EU provides a more comprehensive picture on exposures, risks, potential pockets of vulnerabilities

>Peer analysis, identification of institutions posing systemic risk (outliers)

>Provide high quality benchmarks for stress testing (harmonised definitions) and asset quality reviews

>Improve analysis on concentration risk (large exposures, geographical breakdown of exposures)

>Facilitate data sharing among competent authorities

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Outline

> Financial supervision in the EU – role of the EBA> Single rulebook and the case for harmonised supervisory data> Technical standards on supervisory reporting

– Solvency– Financial reporting– Asset encumbrance– Large Exposures– Liquidity– Leverage ratio– Proportionality

> Facilitating implementation of supervisory reporting requirements

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ITS on supervisory reporting – what is covered

EBA to deliver ITS in the following areas of the Capital Requirement Regulation (CRR):>Art 99 Solvency reporting, financial reporting>Art 100 Asset encumbrance>Art 101 Mortgage exposures reporting>Art 394 Large exposures reporting>Art 415 Liquidity ratios reporting>Art 430 Leverage ratio reporting

Integrated approach to ITS development>Several ITS packaged as one EU Regulation which is directly applicable to all credit

institutions and investment firms>Use of common structure/conventions/concepts/definitions

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ITS on supervisory reporting – COREP

Reporting population, level of application and scope of consolidation> Credit institutions and investment firms> Consolidated level and individual level> CRD scope of consolidation

Frequency> Quarterly> Exception: semi-annually

– Material operational risk losses (OPR Details)– Securitisation transactions (SEC Details)

> Reporting delay 6 weeks

Compliance monitoring> Monitoring compliance of capital requirements regulation> Granular information on risk parameters, risk concentrations, securitised exposures> Based on the CEBS reporting guidelines

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ITS on supervisory reporting - FINREP

Reporting population, level of application and scope of consolidation> IFRS institutions on a consolidated basis> National supervisory authorities may extend the implementation also to other institutions> CRD scope of consolidation

Frequency> Quarterly, semi-annually and annually> Reporting delay 6 weeks

Monitoring, IFRS-based reporting> Harmonised financial reporting following as much as possible IFRS> Some presentational options have been restricted in order to develop harmonised templates> In some cases the data requirements go beyond IFRS to provide data for risk assessment and

analysis of systemic risks> Forbearance and non-performing loans reporting> Based on the CEBS reporting guidelines

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ITS on supervisory reporting - Modules

Application Frequency Objective

LiquidityCredit

institutions

and

investment

firms

Consolidated

level and

individual

level

CRD scope

of

consolidation

Monthly/quarterly2/6 weeks reporting delay

Monitoring and calibrationEBA to report to the Commission

Large Exposures

QuarterlyReporting delay 6 weeks

Compliance monitoringConcentration risk monitoringBased on CEBS reporting Guidelines

Leverage Ratio

Monitoring and calibrationEBA to report to the Commission

Asset encumbrance Monitoring level of encumbered assets

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Outline

> Financial supervision in the EU – role of the EBA> Single rulebook and the case for harmonised supervisory data> Technical standards on supervisory reporting – main features> Facilitating implementation of supervisory reporting requirements

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ITS on supervisory reporting - Data Point Model

What is the DPM?> A data point is a data element required in the reporting framework, i.e. each template cell will

correspond to a data point, and different cells with the same meaning should correspond to the same data point.

> The DPM is a data model that captures the information requirements of the reporting framework. > The DPM is a dimensional model, meaning that each data point is categorised by a set of elements

of different dimensions.

Why the DPM?> Complex or dubious business concepts are broken down into more elementary concepts, in order to

clarify the meaning of a data point.> The DPM expresses the reporting requirements at a logical level, without regard for any particular

IT implementation.> The DPM bridges the gap between business and IT languages, providing a common ground of

understanding.> The DPM will be the source for the generation of XBRL taxonomies.

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ITS on supervisory reporting - ProportionalityReporting requirements shall be proportionate to the nature, scale and complexity of the activities of the institutions

Proportionality included in different ways:>Size of an institution

–Small institutions are exempted for some templates (asset encumbrance)>Non-significant activities/exposures/risk

–Threshold for level of exposure/activity (Geographical breakdown, derivatives in leverage ratio)

>Inherent proportionality–Templates reported only if a special approach/method is used or if institution has

exposures (SEC, SEC details, IRB)>Reduced frequency

–Templates where reduced frequency provides adequate data (Group structure, detailed and contingent asset encumbrance)

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Facilitating implementation – Q&A mechanism

Uniform interpretation of data requirements across EU> Detailed instructions included in the ITS Annexes> Q&A tool on EBA website (as of July 2013)> Public can post their questions via a web tool>EBA will

–Review, categorise and prioritise questions–Publish all answers–Translate answers where necessary

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Facilitating implementation – General timeline

Dec 2011 •Public consultation on ITS (solvency, financial information and mortgage exposures)

Feb 2012 •Public consultation on ITS (large exposures)

June 2012 •Public consultation on ITS (liquidity and leverage)

Sept 2012 •1st interim release of ITS package

Mar 2013 •2nd interim release of ITS package

July 2013 •Final ITS package (assuming CRR publication in OJ)

Jan 2014 •ITS requirements apply (CRR application date: 1.1.2014)

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Facilitating implementation – amendments of the ITS

Currently under consultation>Asset encumbrance>Forbearance and Non-performing loans (FINREP)>Liquidity monitoring tools

The ITS will be amended with these parts after the consultationsApplication dates will be later than 1 January 2014