Since the publication of the finalized CRD IV Package in the Official Journal on 27 June 2013, the European Banking Authority (EBA) now has a clear timeline for managing the unenviable task of getting Europe’s 8,300 credit institutions and 32 National Competent Authorities (NCAs) to all ‘speak the same language’.
Up until now, supervisory reporting in Europe’s financial sector has been something of a patchwork: regulated firms may report similar information to their respective national regulators but as they do so in slightly varying ways, it makes comparisons difficult. Now that the CRD IV Package has been finalized and published, the first step in reaching the new directive's ambitious objective requires translating the contents of the CRD IV Package into what is known as Implementing Technical Standards (ITS).
In order to assist a uniform implementation across Europe of the ITS on supervisory reporting requirements for regulated entities, the data items included in the consultation EBA/CP/2012/05 have been translated into a Data Point-Model (DPM). The DPM is a structured representation of the data, identifying all the business concepts and their relations (including validation rules), and it contains all the relevant technical specifications necessary for developing a reporting solution. The EBA is currently in the process of finalizing the ITS ahead of the 1 January 2014 application date, and this process involves adapting the DPM and associated XBRL (eXtensible Business Reporting Language) taxonomies for COREP and FINREP to reflect the final CRR/CRD IV text, as well as the feedback received from stakeholders.
What is clear is that for the objectives of the CRD IV Package to be achieved, it is crucial that there be convergence between the structural and technical choices made by the EBA in the COREP and FINREP taxonomy translation of the regulatory texts, and the technology choices made by National Competent Authorities and regulated firms with regard to producing, validating and collecting the regulatory data required of them.