EBA欧洲银行-BBSFA_CP06_14页_2mb

Summary of the Belgian Bankers' and Stockbrokering Firms' Association Comments on the FINREP Model

Core Content

The Belgian Bankers' and Stockbrokering Firms' Association (BBA) has submitted comments on the CEBS proposal for the FINREP model (CP06). The BBA supports the harmonisation of European financial reporting based on IFRS, as it provides a common framework for consistency. However, they express concerns about the current approach of CEBS, which they believe results in only standardisation rather than true harmonisation.

Main Viewpoints

• Harmonisation vs. Standardisation: The BBA argues that the FINREP model should aim for harmonisation, not just standardisation, of financial reporting across the EU. They believe that the current model allows for too much flexibility, leading to a lack of consistency.
• Supervisory Convergence: The BBA suggests that the harmonisation of reporting should be accompanied by the harmonisation of supervisory practices. They argue that the CEBS approach does not adequately address this.
• Proportionality and Cost-Benefit Analysis: The BBA advocates for the principle of proportionality, ensuring that the reporting requirements are justified by a real prudential need and that the cost-benefit analysis is considered.
• Avoiding Over-Complexity: They warn against the confusion between quantity and quality in reporting, emphasizing that excessive detail does not equate to better supervision.

Key Information

• The BBA supports the use of IFRS as a basis for financial reporting but criticizes the current model for not aligning with the actual prudential needs of supervisors.
• They argue that the current FINREP model allows for too much flexibility, leading to unnecessary complexity and additional costs for banks.
• The BBA calls for a simplified and more consistent reporting framework that reflects the real needs of supervisors across the EU.
• They recommend that the FINREP model should not impose additional data requirements beyond what is necessary for prudential supervision and that it should align with the Common Reporting (COREP) model.
• Specific recommendations are made for the simplification of several tables and the removal of unnecessary breakdowns.

Questions and Comments on the Consultation Paper

2.1. IAS/IFRS Consistency

• The BBA believes that the FINREP model should reflect the flexibility available under IFRS.
• They point out that some data, such as the valuation of securities at clean or dirty price, and the choice between trade or settlement date accounting, should not be restricted.
• They oppose the inclusion of specific breakdowns like 'fair value of the collateral or other credit enhancements' in Table 39D, as these are not required under IFRS.

2.2. Appropriateness of Common Practice (CP)

• The BBA does not support the use of CPs unless they meet a prudential need in a qualified majority of EU Member States.
• They consider the breakdown of 'staff expenses' in Table 35 to be a local requirement with no clear prudential justification.

2.3. Availability of Data

• Most data are available within reporting entities, but not necessarily through the accounting systems.
• The BBA emphasizes the need for the reporting framework to be neutral in terms of internal organisation, to avoid unnecessary IT adaptations.
• They highlight that data for Table 43A (repurchase agreements) are not available in the accounting system and are only found in the middle office.

2.4. Steps for Further Convergence

• The BBA recommends that CEBS should aim for full harmonisation at the lowest common requirements across the EU.
• They advocate for the mutual adjustment of FINREP and COREP reporting models.
• The principle of proportionality should be applied to ensure that reporting requirements are justified and balanced.
• The guidance should be clear and not overly descriptive, to avoid affecting internal systems.

2.5. Appropriateness of Guidance in Annex 2

• The BBA supports the development of adequate guidance for implementation.
• The guidance should ensure a uniform interpretation of the tables by auditors and internal teams.
• It should not result in a European interpretation of IFRS that conflicts with international standards.

Comments on the Full Set of Tables

• Counterparties: The BBA suggests aggregating COREP counterparties into fewer categories under FINREP.
• Fair Value Breakdowns: They oppose the breakdown of fair values per counterparty or per product, as these are not IFRS requirements.
• Simplification Requests: The BBA recommends simplifying several tables, including Table 43A (repos), Table 15 (tax), and Table 45 (defined benefit plans).
• Tax Tables: They suggest simplifying the structure of tax-related tables and limiting the number of breakdowns.
• Provisions and Hedge Accounting: They propose merging certain columns and removing unnecessary data from reporting.

Conclusion

The BBA is critical of the current FINREP model, arguing that it lacks true harmonisation and introduces unnecessary complexity and costs. They call for a more consistent, justified, and simplified approach to financial reporting in Europe, based on the principles of proportionality and a level playing field for all supervisors.