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ABI Comments on Amendments to the Guidelines on FINREP Summary

Core Content

The Italian Banking Association (ABI) provided detailed comments on the CEBS consultation regarding amendments to the FINREP guidelines, published on 10 March 2009. ABI emphasized the importance of aligning the FINREP framework with IFRS standards to ensure consistency and reduce reporting burdens for banks, especially cross-border institutions.

Main Views

1. Reducing Reporting Burden

• Yes, ABI believes the revised FINREP Guidelines will reduce reporting burdens at the consolidated level for cross-border credit institutions.
• The proposal allows for a consistent implementation of FINREP templates, promoting higher harmonization and stronger convergence in supervisory reporting across the EU.
• However, the overall reduction depends on the extent of national discretion in collecting non-core data.

2. Enhancing Uniformity in Financial Reporting

• Yes, ABI supports the idea of making financial reporting in the EU more uniform.
• They consider the FINREP Guidelines an important step toward increasing comparability of financial information reported to different supervisors within the EU.
• To achieve full uniformity, ABI advocates for the elimination of national discretions as soon as possible, as the current option for national authorities to choose between minimum and maximum reporting requirements creates an uneven playing field.

3. Mandatory Application of FINREP at the Consolidated Level

• In Favor, ABI supports the mandatory application of FINREP at the consolidated level by EU Member states.
• This would ensure a level playing field, avoid competitive distortions for cross-border banking groups, and improve the supervision of such groups.

4. Extension of FINREP Guidelines to Solo Level

• Agree, ABI supports extending the use of FINREP guidelines to the solo level.
• The introduction of FINREP at the solo level necessitates an accounting framework in line with IFRS.
• Entities should be granted the option to use IFRS only at the solo level, particularly in countries where IFRS is not currently allowed at that level.
• For Italian banks, the use of FINREP at the solo level is not an issue, as they already apply IFRS to their statutory financial statements.

5. Link Between FINREP and IFRS-GP Taxonomy

• Agree, ABI supports a close link between the FINREP framework and the IFRS-GP taxonomy.
• This alignment is crucial to limit reporting burdens and ensure consistency with IFRS standards.
• If the IFRS-GP taxonomy is updated yearly, the same should apply to the FINREP taxonomy.

6. Reporting Frequencies and Deadlines

• ABI agrees on the need to harmonize reporting frequencies and deadlines across EU countries.
• They support aligning FINREP reporting dates and frequencies with the publication of financial statements.
• However, they note that FINREP should not share the same frequency as COREP, as the two frameworks serve different purposes (accounting vs. prudential).
• ABI suggests that the remittance period for solo-level data should align with that of consolidated data, setting both at 50 business days.
• They also agree with the possibility of extending the deadline for annual reporting beyond 40 business days to allow for balanced data with public audited financial statements.

7. Versioning Policy

• ABI highlights the need for the revised FINREP guidelines to take into account the upcoming changes to IAS 39, as the IASB is working on replacing its financial instruments standards.
• The current versioning policy, based on IFRS of 31 December 2008, may become outdated with these changes.

Key Information

• Objective: Reduce reporting burdens and enhance uniformity in financial reporting across the EU.
• Alignment with IFRS: ABI stresses the importance of keeping the FINREP framework in line with IFRS standards.
• National Discretions: Eliminating national discretions is essential for achieving full harmonization.
• Consolidated vs. Solo Level: Mandatory application at the consolidated level is supported, and extension to the solo level is also welcomed.
• Taxonomy Link: A close link between FINREP and IFRS-GP taxonomy is necessary for consistency.
• Reporting Frequency: Harmonization of reporting frequencies and deadlines is needed, with specific alignment suggestions.
• Future IFRS Changes: ABI urges the revision of FINREP guidelines to reflect upcoming changes in IFRS standards, particularly IAS 39.

Conclusion

ABI’s comments reflect a strong support for the harmonization of financial reporting in the EU, with a focus on reducing burdens and aligning with IFRS standards. They advocate for the elimination of national discretions, the mandatory application of FINREP at the consolidated level, and the extension of its use to the solo level where feasible. Additionally, they emphasize the need for alignment with the IFRS-GP taxonomy and the importance of updating the FINREP framework to reflect future IFRS changes.