Pellizzari Giancarlo
Head of Prudential Policy
Dexia Group
1

 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
2

Dexia Holding:
27,5 EURBn Capitalization, world leader in public financing
 Dexia Bank Belgique
 Dexia Crédit Local (France)
 Dexia BIL (Luxembourg)
 FSA (Financial Security Assurance) – USA – Credit enhancement
 Dexia Insurance Belgium
 Deniz 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
3

Business portfolio : Segment contribution to net income - Group share (1)
(1) Excluding non-operating items and central assets Treasury and Financial
Markets
Asset
Management 14%
Investor Services
Insurance
5%
4%
4%
51%
22%
Personal Financial
Services
Net income – Group share
Public/Project Finance and Credit enhancement
FY 2005: EUR 2,038 M
FY 2006: EUR 2,750 M
4

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.
5

The reporting
 COREP
 Group level : Belgium
 Entity level : Belgium, France, Luxembourg
 Subsidiary level : Italy, Austria, Germany, etc.
 FINREP
 Group level : no reporting required
 Entity level : Belgium, France, Luxembourg
 Subsidiary level : Italy, Austria, etc.
 Others:
 USA requirements, Solvency ratio, local requirements
6

 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 in
 One IT system
 One platform
 One database 7

Basel II IFRS Solvency II
Pillar I Pillar III IFRS 7 F/S Pillar III Pillar I
+ notes
Group Group Group Group
BE FR LU BE FR LU BE FR LU BE FR LU
BE (+group) BE
8

Entité de booking X
Systèmes comptables
Systèmes de gestion
Risque de marché
FERMAT
Risque opérationnel
J-Port
MAGNITUDE Fichiers DMV3
FERMAT
Table données INPUT
Moteur de calcul RWA
Résultats détaillés
Résultats agrégés
Risque
Crédit
Reporting réglementaire
Résultats agrégés
Risque
Marché
Résultats agrégés
Risque
Opérationnel
Données
Fonds
Propres
Résultats agrégés
Comptables
Etats
COREP
Etats
FINREP
9

Dexia group
IFRS
BIL group
IFRS
Dexia Bank group
IFRS
Deniz Bank Group
IFRS
Dexia Crédit Local group
IFRS
RBC - DFS
IFRS
Dexia Asset
Management group
Lux
GAAP
Dexia Insurance group
IFRS
Banking institutions
Insurance companies
Other
Adinfo group
No Conso
(BE
GAAP)
Crediop
IFRS
FSA
US
GAAP
10

STATUTORY CONSOLIDATED
SAP
Holding
CONSO
DHLD
BE
CONSO
DBB
INTERNAL
REPORTING
FR
LU
DBB
DCL
MAGNITUDE
COMMON PARAM
CONSO
DCL EXTERNAL
REPORTING
SPEC. LOCAL PARAM
CONSO
DBL
CHECK CHECK
FINREP
XBRL
COREP
XBRL
DBL VISUAL
SCOPE
MIS CONSO
ESSBASE
11

 Many EU countries where Dexia is active are using XBRL as reporting language but
 Not in all countries
 Mostly 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.
12

 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 XBRL
 One integrated database (kind of Group taxonomy)
 « One fits all »
13

 Used by credit departments
 Used 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
14


 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
15

 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
16

 Regulatory interpretations
Example
 Collateral definition
 Equity split
 Counterparties
 Calculations
 Etc.
 Software offer
 COREP + FINREP
 IFRS
 Internal
 Motivation of people (difficulty to see the benefits)
17

 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 involvement
 Software providers needs to understand the banks’ real needs

18

 Press release of April 2007: cooperation between US and EU, including regulatory matters
BUT:
FSA
Bundes bank
SGCB BdI CBFA etc.
19

Within ONE group
ONE tag
ONE definition
ONE validation/business rule
ONE taxonomy
ONE country
ONE EU reporting
ONE CEBS (FINREP-COREP) EU base reporting completed by additional country requirements
=> Need to follow the XBRL principles
20