Xi Banking Supervisors Xbrl Workshop 20 November, 2009 Vienna


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  • Thank FESE – Federation of Euroepan Securities Exchanges – for inviting the Commission to talk about the XBRL – the Extensible Business Reporting Language. XBRL – a universal financial reporting framework adopted by several major jurisdictions in the World.
    My name is Piotr Madziar and I represent the European Commission – Direction General Internal Market and Services. Despite the official invitation from your side I must recall that all that I say here is my personal opinion and can not be taken for the official of the European Commission.
  • Despite the fact that I have been asked to talk about the outcome of the consultation on the Review of the Accounting directives:
    - The Council Directive of 25 July 1978 based on Article 54 (3) (g) of the Treaty on the annual accounts of certain types of companies (78/660/EEC). , and
    - The Council Directive of 13 June 1983 based on the Article 54 (3) (g) of the Treaty on consolidated accounts (83/349/EEC),
    in the XBRL aspect,
    I decided to provide an overview of the Commission’s and other Institutions’ initiatives that, either explicitly or implicitly (potentially) identify XBRL and common business reporting format as means to deliver in several policy areas.
    That includes in particular the recent prominent policy to regulate financial markets in the wake of the financial crisis, the European simplification and reduction of administrative burden program, a number of initiatives oriented ot restoration of confidence in the financial markets of the investors, citizens and institutions and, finally numerous measures to streamline the initiatives in the area of information society, ICT infrastructure and access to it.
  • Here my intention was to depict main EU policies driving the concept of harmonizing the business data and identifying XBRL as the only available, royalty-free, quality, global standard, notably the Simplification policy and the crisis-related measures.
    The Barroso Commission, on its outset, decided to provide a meaningful follow-up on the Simplification initiative (on the left), by targeting the 25% administrative burden reduction for businesses as one of the measures to deliver on the Lisbon 2000 agenda. A specialized HLG consisting of high profile individuals and chaired by Mr Stoiber was created by the Commission.
    Also the MS used various opportunities to contribute to this initiative, providing policy initiatives and their expertise enriching the EU approach.
    The financial crisis, looming since early 2008, provided new challenges the EU institutions were expected to confront: the global and European supervisory structure, market transparency and confidence.
    Other institutions made significant contributions towards forging a common view: the Council and the Parliament.
    We received an initial input from the de Larosiere Group, and subsequently the G20 recommendations as regards the anti-crisis measures to follow.
    Other important policies also constitute important potential for XBRL use. Company disclosures, part of the corporate governance framework provide another vast opportunity for alignment between existing jurisdictions, frameworks and systems.
    Last but not least, European institutions provide selective measures to boost European competitiveness by automation of business processes, harmonisation of standards and education, within the Lisbon agendas.
  • Xi Banking Supervisors Xbrl Workshop 20 November, 2009 Vienna

    1. 1. Proposals, Conclusions and Dialogues Piotr Madziar – European Commission 20 November 2009, XI European Banking Supervisors XBRL Workshop - Vienna
    2. 2. Topics • European Commission proposal for supervisory reform • Critics • Next steps?
    3. 3. XBRL driving forces XBRLSimplification Crisis Stoiberg De Larosiere G20 EU Council EP COM MS
    4. 4. De Larosiere Reform • Financial crisis driven • Position of national regulators? • Global aspect • Commission absolute priority.
    5. 5. European Parliament Resolution on Lamfalussy follow-up: future structure of supervision (September 2008) • Calls upon the L3 Committees to design common reporting standards • Multi-purpose format such as XBRL • Throughout the EU • Calls upon the Commission to submit adequate legislative proposals
    6. 6. De Larosiere proposal • Commission’s proposal of 23 September 2009 • ESRB and ESFS = ECB + ESAs + national regulators+… • Banking: colaterals, capital, fund transfer reg,… • Insurance: insurance and reinsurance, conglomerates, institutions, Solvency II, anti money laundering,… • Securities & Markets: transparency, markets in FI, market abuse, prospectuses, hedge funds, CRA, take-over bids, settlements, financial collateral arrangements, ... • Technical standards,… XBRL? • Links to international standard setters,… XBRL?
    7. 7. More powers for ESAs • Technical standards but criteria in Community legislation • Flow of information • Supervisory culture and supervisory practices • Last resort option in case of disagreement • Training programmes • Aggregate micro-prudential information from national supervisors • Set-up a Central European Database. The information will be available for the relevant authorities in colleges of supervisors and forwarded to the European Systemic Risk Council • Technical arrangements with international organisations and administrations of third countries.
    8. 8. Proposed structure for Banking EBA – European Banking AuthorityChairperson Mgt Board Executive Director ECA - European Court of Auditors OLAF – l’Office européen de lutte anti-fraude European Commission € Banking Stakeholder Group Board of Supervisors
    9. 9. Appeal processes EU Court of First Instance Member State Member State NSA NSA NSA EU Court of Justice Board of Appeal for 3 ESAs EU Council - QMV EBA QMV
    10. 10. ESFS ESFS - EU System of Financial Supervisors ESMA - European Securities and Markets Authority EIOPA - European Insurance and Occupational Pension Authority EBA - European Banking Authority Joint Committee of European Supervisory Authorities College of Supervisors NSA NSA NSA – National Supervisory Authority NSA NSA NSA NSA NSA NSA NSA NSA NSA
    11. 11. ESRB – EU Systemic Risk Board ESRB – European Systemic Risk Board ECB ESFS – European System of Financial Supervision 3rd Countries & Int’l
    12. 12. Practicalities, Agenda • Financial assistance 37- 70 M€ in years 2011-2016 • 40% from the Community budget • London, Paris, Frankfurt • Status similar to EU Agency • 74-90 staff (2016) • EU Staff Regulation (independence, impartiality).
    13. 13. Financial Market-driven regulatory data reform Common Reporting Framework Regulated Financial Markets Governments All Markets?
    14. 14. Critics
    15. 15. Critics Stop! R e a l a r g u m e n t s Sovereignty Treasury Global dimension Exclusion and Dominance
    16. 16. Sovereignty of MS: Critics R e a l a r g u m e n t s •Host states allowed to take steps if weaknesses are identified - that can be abused for commercial or protectionist reasons •ESAs empowered to override national regulators •Changes give EU more powers. Emergency declared by the Commission without involvement of the Council. Unclear emergency procedure. •MS should decide first what will ESAs do and how
    17. 17. Critics R e a l a r g u m e n t s •Not clear how global cohesion is addressed •Need for allignment with G-20 and Basel. •It would be very bad for EU and its financial centres If we forge ahead disregarding what US, Switzerland and others are doing Global cohesion:
    18. 18. Fiscal responsibilities of MS: Critics R e a l a r g u m e n t s •June’s ECOFIN mandate (shoulnd’t impinge on the fiscal responsibility of the MS) breached •EU financial supervisory structure needs an EU fiscal arrangement
    19. 19. Critics R e a l a r g u m e n t s •QMV to recognize the size and importance of financial services relative to GDP Exclusion and Dominance •Any compromise would need to assure that host states receive all prudential information about entire group. •Eurozone dominance in ESRB •Bankers dominance in ESRB, disregarding the fact that the choice between security and price is a democratic trade-off decision taken by governments, for the citizens.
    20. 20. Options/Scenarios Approach Implications Effects Yes we can “Political” arrangement despite all the odds Fast, “big bang” type of approach Now, with the big stakes and big appointments discussed Yes but … Prolonged existence of the current L3 non-mandatory coordination Prolonged existence of CAN DOs and CAN’T DOs Until next financial crisis Is the money spent wisely? Substitutes: colleges? ECB role? New revised Commission’s proposal?
    21. 21. Contacts • DG Internal Market & Services website: http://ec.europa.eu/dgs/internal_market/index_en.htm • Piotr Madziar +32-(0)2-2950869 piotr.madziar@ec.europa.eu