EBA欧洲银行-FBE_CP06_8页_204kb

FBE Observations Summary on CEBS Consultation Paper on Financial Reporting

Core Content

The FBE has expressed significant concerns regarding the proposed Consolidated Financial Reporting Framework by CEBS. The main criticisms revolve around the lack of harmonization, excessive reporting burden, and the imposition of requirements that go beyond IFRS.

Main Concerns

The FBE outlines three primary concerns with the proposed framework:

1. Lack of Harmonization

   • The framework does not achieve sufficient harmonization, as national supervisors may require different information and levels of detail.
   • This leads to a lack of a level playing field between banks from different Member States, hindering the creation of a unified internal market for financial services.

2. Excessive Reporting Burden

   • The framework does not significantly reduce the reporting burden on banks.
   • It introduces numerous detailed requirements that may be impractical or unnecessary for certain institutions.

3. Beyond IFRS Requirements

   • The proposed framework imposes requirements that exceed those of IFRS.
   • It includes disclosures and classifications not mandated by IFRS, such as detailed fair value breakdowns by counterparty or product, and specific impairment methods not aligned with IFRS.

Key Issues Identified

1. IFRS Consistency

• The framework includes reporting requirements that go beyond IFRS, such as:

  • Table 4: Breakdown of derivatives by type, not just nature.
  • Tables 6, 7, 8, 39D: Fair value breakdowns by counterparty.
  • Tables 19, 20, 21: Fair value breakdowns by product.
  • Chapter II of explanatory guidance: Detailed impairment method for available for sale financial assets.
  • Table 39B: Time-bucket breakdown of impairment, inconsistent with ED7.

• References to IFRS definitions: Many templates reference IFRS definitions (e.g., IAS 39, IAS 32) rather than actual disclosure requirements, which is not appropriate.

• XBRL Compliance: Some tables (e.g., 39B, 14) may not conform to the XBRL Taxonomy.

2. Use of Common Practice (CP)

• The FBE believes that referencing "Common Practice" is problematic, as it:

  • Covers reporting items not supported by IFRS.
  • May reflect practices from only a few Member States, not EU-wide norms.
  • Leads to ambiguity and confusion for banks, making it difficult to determine what is required.

• Recommendation: All references to Common Practice should be removed from the framework.

3. Availability of Data

• Many data points required by the framework are not readily available in banks' IT systems:

  • Gross currency exchange: Not typically available.
  • Detailed breakdowns of derivatives and hedge accounting: Often require manual access.
  • Staff expenses: Not easily available in consolidated reports.
  • Layered approach: Requires complex breakdowns of balance sheet and profit and loss data.

• Impact: These requirements could lead to significant administrative burdens and may not provide meaningful information.

Recommendations for Further Convergence

The FBE suggests the following steps to improve the framework:

• Harmonization: CEBS should aim for total harmonization of supervisory reporting across the EU.
• Focus on Key Data: The framework should be limited to data that are effectively used in ongoing supervision and risk-based policies.
• Differentiation by Frequency: Distinguish between yearly, quarterly, and semi-annual reporting requirements to manage detail appropriately.
• Reduce Statutory Data Requirements: Commit to reducing the amount of statutory financial data required by EU supervisors.
• Exemption for Small Banks: Smaller banks should not be required to adopt the framework, as it may not be beneficial for them.
• Clarify Definitions and Classifications: Ensure consistency between FINREP and COREP by aligning definitions and classifications, especially for terms like "central government."

Explanatory Guidance Issues

• The FBE welcomes the explanatory guidance but highlights that:
  • It may restrict flexibility and accounting options permitted under IFRS.
  • The treatment of accrued interest is overly prescriptive and not in line with IFRS.
  • The impairment method for available for sale assets is not based on IFRS or common practice.
  • Some definitions (e.g., "central government") lack clarity and may vary by country.

Conclusion

The FBE calls for a thorough review of the proposed framework, emphasizing that it should not be adopted in its current form. They stress the importance of aligning with IFRS, reducing reporting burdens, and ensuring clarity and consistency in definitions and classifications. The framework should be designed to provide relevant information while being subject to a cost-benefit analysis.