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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