technical standards on supervisory reporting
DESCRIPTION
Technical Standards on supervisory reporting. XBRL UK 17 June 2013 | London Meri Rimmanen | EBA Wolfgang Strohbach | EBA. Outline. Financial supervision in the EU – role of the EBA Single rulebook and the case for harmonised supervisory data - PowerPoint PPT PresentationTRANSCRIPT
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© 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