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XBRL: The vision of Dexia. Pellizzari Giancarlo Head of Prudential Policy Dexia Group. Agenda. Dexia: an European group The regulatory environment Main challenges Complexity ? XBRL Where are we ? Where do we go ? How to do it ? EU-US convergence Conclusions. Dexia: an European group. - PowerPoint PPT Presentation
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XBRL: The vision of DexiaXBRL: The vision of Dexia
Pellizzari GiancarloPellizzari Giancarlo
Head of Prudential PolicyHead of Prudential Policy
Dexia GroupDexia Group
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AgendaAgenda
Dexia: an European groupThe regulatory environmentMain challengesComplexity ?XBRL
Where are we ?Where do we go ?How to do it ?
EU-US convergenceConclusions
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Dexia: an European groupDexia: an European group
Dexia Holding: 27,5 EURBn Capitalization, world leader in public financingDexia Bank BelgiqueDexia Crédit Local (France)Dexia BIL (Luxembourg)
FSA (Financial Security Assurance) – USA – Credit enhancement
Dexia Insurance BelgiumDeniz Bank (6th largest private bank in Turkey)Factoring, leasing, real estate, IT, etc.
A group of 241 entities, 33.321 staff members and present in 33 countries
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Dexia: an European groupDexia: an European group
51%
22%
4%4%
5%
14%
Business portfolio : Segment contribution to net income - Group share (1)Business portfolio : Segment contribution to net income - Group share (1)
Investor Services
Personal FinancialServices
Treasury and Financial Markets
Public/Project Finance and Credit enhancement
(1) Excluding non-operating items and central assets
Asset Management
Insurance
Net income – Group share FY 2005: EUR 2,038 M FY 2006: EUR 2,750 MNet income – Group share FY 2005: EUR 2,038 M FY 2006: EUR 2,750 M
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The regulatory environmentThe regulatory environment
Home – host supervisors:Home supervisors (working in a college)
CBFA – Belgian Banking, Finance and Insurance Commission (as lead supervisor)
The French Commission Bancaire Commission de Surveillance du Secteur Financier (Luxembourg)
Host supervisors EU supervisors
Bundesbank – Bafin (Germany) Banca d’Italia (Italy) Banco d’Espana (Spain) Etc.
Other countries BRSA (Turkey) SEC (USA) OFSI (Canada) Japan FSA Singapore Etc.
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The regulatory environmentThe regulatory environment
The reportingCOREP
Group level : BelgiumEntity level : Belgium, France, LuxembourgSubsidiary level : Italy, Austria, Germany, etc.
FINREPGroup level : no reporting required Entity level : Belgium, France, LuxembourgSubsidiary level : Italy, Austria, etc.
Others: USA requirements, Solvency ratio, local requirements
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Main challengesMain challenges
Cross regime requirements (IFRS, Basel II, Solvency II)
Cross country interpretation (within one single regime)
Cross business needs (Risk, Accounting, Business control, others ?)
Timeline for implementing CEBS update in the IT systems of the bank: CEBS release March 200x End of consultation June 200x Application for March 200x+1 Without taking into account the national extensions…
All these should be integrated inOne IT systemOne platformOne database
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Complexity ?Complexity ?
Basel II IFRS Solvency II
Pillar I Pillar III IFRS 7 F/S Pillar III Pillar I + notes
Group Group Group Group BE (+group)BE
BE FR LU BE FR LU BE FR LU BE FR LU
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XBRL: the current situationXBRL: the current situation
Systèmes comptables
Systèmes de gestion
Entité de booking X
Fichiers DMV3
Table données INPUT
Résultats détaillés
FERMAT
Moteur de
calcul RWA
Reportingréglementaire
RésultatsagrégésRisqueMarché
Résultatsagrégés
RisqueCrédit
RésultatsagrégésRisque
Opérationnel
DonnéesFonds
Propres
Etats COREP
Etats FINREP
Résultatsagrégés
Comptables
MAGNITUDE
Risque de marché
Risque opérationnel
FERMAT J-Port
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XBRL: the current situationXBRL: the current situation (the accounting environment)(the accounting environment)
Dexia group
BIL groupDexia Bank
group
Dexia Crédit Local
groupDeniz Bank Group
RBC - DFSDexia Asset
Management group
Dexia Insurance
groupAdinfo group
Banking institutions
Insurance companies
Other
Crediop FSA
IFRS
IFRS IFRS IFRS IFRS
IFRSIFRSIFRS US GAAP
No Conso
(BE GAAP)
Lux GAAP
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XBRL: the current situationXBRL: the current situation (the accounting environment)(the accounting environment)
BE
LUFR
SAPHolding
MAGNITUDECOMMON PARAM
SPEC. LOCAL PARAM
DBB
DCL
DBL
STATUTORY CONSOLIDATED
CONSODHLD
CONSODBB
CONSODCL
CONSODBL
VISUALSCOPE
MIS CONSOESSBASE
CHECK CHECK
INTERNAL REPORTING
EXTERNAL REPORTING
FINREP
COREPXBRL
XBRL
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XBRL: the current situationXBRL: the current situation
Many EU countries where Dexia is active are using XBRL as reporting language butNot in all countriesMostly presented and implemented as an additional
burden
In Belgium an additional XBRL reporting is required for the Balance Sheet Office reporting (statutory accounts of approx 270.000 companies), National Bank of Belgium.
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XBRL: XBRL: AdvantagesAdvantages
Use XBRL as a tool for more harmonization, flexibility and gain of time both vertically and horizontally
We thus need:XBRL at the beginning of the reporting processes
(public, COREP, FINREP and internal)Softwares that read XBRLOne integrated database (kind of Group taxonomy)
« One fits all »
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XBRL: AdvantagesXBRL: Advantages
Used by credit departmentsUsed instead of xls on websites (like Microsoft,
Monte dei Paschi di Siena, etc.)Other regulatory reporting (like VAT and tax in
NL, AML in Spain, etc.) Internal reporting (reconciliation Consolidation
and Risk databases)Mapping with new regulatory requirements
Necessity to create a working group within the group with technical specialists and business specialists Better coordination Decrease of cost
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XBRL: AdvantagesXBRL: Advantages
A potential integration tool for the group reporting External :
Known and understood by all May be the base of a worldwide reporting May avoid repetitive reporting in different presentations, but with
the same content to regulators and local authorities Internal :
May be the base for internal reporting (consolidation) May allow “drill-down” analysis with a good organisation of
taxonomy Will make the life easier for Financial Communication and members
of the Boards when they compare the contribution of one company in the consolidated accounts with the financial statements published by a subsidiary in its country
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XBRL: AdvantagesXBRL: Advantages
A potential integration tool for groups
Only one reporting, for internal and external reporting Possibilities for people to move from one company to another Advantage for managers to understand how transactions are
recorded and the impact on the financial statements Powerful tool for the controller and people from investor relations
to analyse the contents of the financial statements, both in the group and sub – groups, including the local regulatory reporting
Use of IFRS and worldwide taxonomy may help groups to more easily integrate newly acquired subsidiaries
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XBRL: the issuesXBRL: the issues
Regulatory interpretationsExample Collateral definition Equity split Counterparties Calculations Etc.
Software offer COREP + FINREP IFRS Internal
Motivation of people (difficulty to see the benefits)
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How to solve it ?How to solve it ?
Stronger CEBS policy, but also more communication to banks with regards to the XBRL benefits (XBRL should not be a cost and administrative burden)
Stronger banking industry involvementSoftware providers needs to understand the
banks’ real needs
One single definition of taxonomy
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EU – US convergenceEU – US convergence
Press release of April 2007: cooperation between US and EU, including regulatory matters
BUT:
SEC-FDIC
EU CEBS
This way ?
Or this way ?
Bundesbank
SGCB BdI CBFA etc.FSA
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ConclusionConclusion
Within ONE groupONE tagONE definitionONE validation/business ruleONE taxonomyONE countryONE EU reporting
ONE CEBS (FINREP-COREP) EU base reporting completed by additional country requirements
=> Need to follow the XBRL principles