Leveraging XBRL Leveraging XBRL Technology to Improve the Technology to Improve the Transparency of Financial Transparency of Financial InformationInformation

Don InscoeDon InscoeAssociate DirectorAssociate Director

FDIC Statistics BranchFDIC Statistics Branch

May 12, 2004May 12, 2004

Auckland, New ZealandAuckland, New Zealand

XBRL: "Exchanging Business Information"9th XBRL International Conference

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TopicsTopics

Background for XBRL-enabled change

Evidence that demand for information increases as it becomes more timely

Measuring the time value of information

Easier access to information boosts demand

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BackgroundBackground

U.S. bank regulators have collected financial information from banks for 70+ years, please see http://www2.fdic.gov/hsob/Milestone.asp?EntryTyp=40 for information on how information collections have evolved

Banks are “called upon” each quarter to submit financial reports to regulators

Bank financial statements “Call Reports” have been published on www.fdic.gov since 1998

Data is available in interactive analytical format back to 1992, www2.fdic.gov/sdi

Agencies have electronic databases back to 1972

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Call Report HistoryCall Report History

FDIC publishesannual statistics

Computerizationbegins

Banks are providedwith comparativereports

Computerizedsurveillance systemsare implemented

Call Reports areprovided to thepublic on magnetictape

FFIEC established -Coordinate Call Reporting

UBPR developed

Reporting requirementsbecome more consistentwith public reportingrequirements

Data made availablevia the Internet

Agencies adoptedGAAP

Public demandincrease

1933

1934 1954 1960 1967 1971 1977 1979 1982 1986 1996 1997

... ...

FDIC Establishedand empowered tocollect information

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Today’s Call ReportToday’s Call Report

Nearly 8,400 banks file each quarter

Most banks are required to file reports within 30 days

Each report contains approximately 1,200 variables

The agencies apply about 1,100 tests “edits” to each report to correct errors before publication

More detailed information filed by large and complex banks

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Call Report modernizationCall Report modernization

FFIEC (Federal Financial Institutions Examination Council) Call Report agencies:

  FDIC (Federal Deposit Insurance Corporation)   FRB (Federal Reserve Board)       OCC (Office of the Comptroller of the Currency)

What is being created?

CDR (Central Data Repository) Collection, validation and distribution of Call Report

data submitted by banks

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Call Report modernization Call Report modernization (con’t)(con’t)

When will it go into effect?

Implementation is planned for the Submission of Call Report data for September 30, 2004

How will it work?

Call vendors receive XBRL taxonomies from FFIEC Vendors write collection software Banks complete Call Reports and file data to FFIEC

via Internet

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Call Report modernization Call Report modernization (con’t)(con’t)

What benefits are expected from the XBRL-enabled system?

Banks will submit more accurate Call Reports

Agency's mechanical review replaced by more strategic process to identify and improve reporting

Information released sooner and in more useful formats

Easier to make changes, add new data series

Development of new products enabled by more timely data disclosed in open extensible standard

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Data usersData users

Public access of Call Report data serves wide spectrum of interests

Users include: banking personnel, investors, corporate treasury managers, news organizations, public policy leaders, academic researchers . . .

Common thread among all is interest in most current possible insight into the financial state of banks and thrifts

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Banks’ financial dataBanks’ financial data

Bank Call Report data typifies many classes of information where “fresher” is more useful

The data in these reports is then released to the public

Nearly 8,400 FDIC-insured banks reported at the end of 2003

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The demand for information The demand for information increases as it becomes more increases as it becomes more timelytimely

Before 2003, Call Reports were not released until all reports had been submitted and edited by regulators

Reports were held until agencies analyzed data and issued press releases

Reports were not released until about 65 days after the quarter ending date

Last year, the process was changed so that reports are released in weekly batches, so almost all reports are now published within 50 days after the quarter ends

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Agencies receive most Call Agencies receive most Call Reports within 30 DaysReports within 30 Days ……

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29

# of days after quarter end

# o

f C

all

Re

po

rts

This graph shows the cumulative number of Call Reports received each day after the report date – most are received within 30 days.

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… … then it takes 30 more days to then it takes 30 more days to edit and publish all reportsedit and publish all reports

1448

3715

5921

7035

79638392

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

24 31 37 45 52 55

# of days after quarter end

# o

f C

AL

L R

ep

ort

s

Agencies must resolve edit exceptions before Call Reports are published.

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WebTrends WebTrends shows more users shows more users obtaining more data…obtaining more data…

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

2/11/2001 6/11/2001 10/11/2001 2/11/2002 6/11/2002 10/11/2002 2/11/2003 6/11/2003 10/11/2003

History - Month/Week Ending Day/Year

Ave

rag

e N

um

be

rof H

its to

Da

ta

Pa

ge

s E

ach

We

ek

0

5,000

10,000

15,000

20,000

25,000

Ave

rag

e N

um

be

r o

f Vis

its fr

om

D

iffe

ren

t IP

Ad

dre

sse

s E

ach

We

ek

Hits

Visits

Three month moving average number of hits to data pages and number of users

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… … and use increases when new and use increases when new data is posted to websitedata is posted to website

Interest peaks just before and just after initial release

Bulk Call Report release (3Q02) typified by increased access activity over moderate time span

Staggered Call Report release (3Q03) shows higher, but more irregular use

Website Activity

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

1 11 21 31 41 51 61 71 81

Days after Quarter End

0

20

40

60

80

100

120

Series1Series5Percentage of Institutions Released (3Q03 Data)Percentage of Institutions Released (3Q02 Data)

Po

rtio

n o

f Q

uar

ter'

s D

ata

Ava

ilab

le (

%)

Ave

rag

e H

its

Hits per Day - 3rd Quarter, 2003(3Q03)

Hits per Day - 3rd Qtr, 2002(3Q02)

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Demand for Call Reports declines Demand for Call Reports declines as they become olderas they become older

“Hits” reflect use of most-recent and prior quarter reports, note that hits diminish sharply as data ages, but year-end data always has higher use

Unique0

2,000

4,000

6,000

8,000

10,000

30,000

90,000

180,000Number of Hits

Mar. Jun. Sep.Dec. Mar. Jun. Sep.Dec. Mar. Jun. Sep.Dec. Mar. Jun. Sep.Dec. Mar. Jun. Sep.Dec. Mar. Jun. Sep.

2001200019991998 20032002

~~ ~~

Hits

160,322

51,269

~~

“Unique” = IP Addresses

Both lines indicate use of most-recent and prior quarter Call Reports; note that hits diminished from 160,000 (September 2003 Call) to fewer than fewer than 2,000 (1998)

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Measuring the time value of Measuring the time value of informationinformation

The new XBRL-enabled process will allow banks to fix data problems before they submit their report

This enhanced business process will enable regulators to release data just after it is received

Reports can be published “straight through processing” sooner after receipt, thereby improving timeliness

Analytical model uses WebTrends statistics to provide a relative measure of how the value of information diminishes as information becomes dated (or “stale”)

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7

1,448

3,715

5,921

7,035

7,9638,3928,392

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

1 24 31 38 45 52 55

# of days

# o

f C

all R

epo

rts

Current

CDR

When CDR is implemented, all Call Reports will be released within 30+ days (blueblue lineline) in contrast to 50+ days in current system (green linegreen line)

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Time value of the dataTime value of the data

Given users’ interest in timely data, its value to them declines as time passes

This value reaches a minimum immediately prior to the next quarterly release

User’s interest over the course of a typical quarter is illustrated in the following

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Use of FDIC’s Call Report Use of FDIC’s Call Report websitewebsite

0

20,000

40,000

60,000

80,000

100,000

0 1 2 3 4 5 6 7 8 9 10

Weeks after Release

Nu

mb

er

of

"Hit

s"

to W

eb

sit

e's

Da

ta P

ag

es

Data page hits usually drop sharply within 3 – 4 weeks after new Call Report data is published

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Rationales for modeling time Rationales for modeling time valuevalue

Provides generalized basis for evaluating website use data

Smoothes out variations and artifact observed in website access

Can be independent of particular metric used to measure website use (hits, visits, unique IP addresses, etc.)

Can quantify benefits vs. costs of changes

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Modeling assumptionsModeling assumptions

Value of multi-quarter repository peaks immediately after new quarter of data is added

This value declines continuously, reaching a minimum immediately before the next quarter’s update

Residual value of historical data is small compared to that of current quarter

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Other modeling and Other modeling and fitting assumptionsfitting assumptions

Between updates, value is lost continuously as time passes

Rate of value loss is proportional to current value (fresh data loses value more quickly than stale data)

User interest in accessing website provides appropriate empirical observations of data’s inherent value

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Model formModel form

Assumptions described previously lead to exponential model to measure the change in data’s value over the quarter

Model is: V(t) = VV(t) = V00ee-Kt-Kt + V + Vresres

where V(t)V(t) is the value of the repository at time, t

VV0 0 is the change in value between updates

VVresres is the residual value of the repository just before an update

““e”e” is the exponential function (2.731…)

K K is the decay rate (“reciprocal lifetime”)

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Example of analytical model Example of analytical model using data shown previouslyusing data shown previously

Proportion of Quarter's Website Access Occuring During Each Week

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

0 1 2 3 4 5 6 7 8 9 10

Weeks after Release

No

rma

lize

d V

alu

e (

1.0

at

up

da

te

tim

e)

Exponential Model

Weekly "Hits" to Website'sData Pages (as a fraction ofall hits during the quarter)

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will measure improvement when data is published sooner (“straight-through processing”)

details to be provided at XBRL International presentation

Model will estimate value Model will estimate value gained by efforts to make data gained by efforts to make data more timelymore timely

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Future strategiesFuture strategies

CDR replaces current Call Report collection process

CDR implementation targeted for September 2004 Call Report

Data to be published immediately after receipt (once we are comfortable with the new CDR)

Call Report taxonomy to published using open BASI (Bank and Savings Institutions) standard

Open standard mapped to legacy taxonomy (facilitates data sharing among different users and data sources)

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FDIC Call Report concepts for “Cash and Balances Due” vary by form

FFIEC Call Report data

has been published

using Federal Reserve

“MDRM” data element

names since the early

1980’s

Equivalent items can have different

prefixes

RCFD

RCON

Prefix:

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Equivalent BASI Concepts for “Cash and Balances Due” do not vary

Call Reports

and BASI have a

number of

common concepts

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FFIEC 031 Call ReportCash and Balances Due

FFIEC 041 Call ReportCash and Balances Due

XBRL Banking and Savings Institutions Taxonomy

Cash and Balances Due

Taxonomy tagging: map common concepts to enable comparisons of Call Reports with other GAAP sources

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Common concepts can be mapped using FDIC Common concepts can be mapped using FDIC and BASI labels to support legacy systems and BASI labels to support legacy systems and enable comparison with other GAAP and enable comparison with other GAAP supply sourcessupply sources

Consolidated Report of Condition Schedule RC – Balance Sheet

Form 31 Form 41

Noninterest-bearing balances and currency and coin RCFD0081RCFD0081 RCON0081RCON0081

Interest-bearing balances RCON0071RCON0071 RCFD0071RCFD0071

Example shows how

“Cash and Balances

due” taxonomy provides

link between different

standards

Form 31 Form 41 BASI Bank and Savings Institutions

RCFD0081RCFD0081 RCON0081RCON0081 CashCashEquivalentsAssets

RCON0071RCON0071 RCFD0071RCFD0071 InterestBearingDepositsBanks

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Taxonomy Taxonomy taggingtagging

Form 031 Form 031 ––Institutions with Institutions with Foreign OfficesForeign Offices

Form 041 Form 041 ––Domestic Domestic Offices Offices

XBRL Banking and Savings Institutions Taxonomy

Cash and Balances Due

FFIEC 031 Call ReportCash and Balances Due

FFIEC 041 Call ReportCash and Balances Due

XBRL Banking and Savings XBRL Banking and Savings Institutions TaxonomyInstitutions TaxonomyCash and Balances DueCash and Balances Due

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FinisFinis