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REUTERS
NEWS, 29/09/2004
Spain to test computerised reporting
of EU bank results
By Elisabeth O'Leary
MADRID, Sept 29 (Reuters) - The Bank
of Spain will launch a pilot programme
next year aimed at curing the problems
plaguing Europe's complex and sometimes
contradictory regulatory regimes, officials
said on Wednesday.
The Spanish central bank aims to test
a special computer language that would
allow banks across the 25-nation European
Union to use one reporting platform
to fulfil most financial reporting requirements
by banking regulators.
Europe is driving to integrate financial
markets by 2005 as part of its Financial
Services Action Plan and a common reporting
method would be a big step towards that
aim. The technology could be used by
all European companies reporting their
results.
The move could help European banks cut
costs and even facilitate cross-border
mergers by bridging huge gaps in the
way regulators set reporting demands
on their banks.
The EU has made lowering hurdles to
cross-border banking mergers one of
its top priorities this year. Bankers
and analysts say the myriad of reporting
demands required by regulators are a
burden to cross-border banking.
Spain plans to promote eXtensible Business
Reporting Language (XBRL), which it
believes will help towards convergence
and transparency in financial markets.
"Europe has a single financial
market which has a single regulator
but in which coexist different national
supervisors and different practices,"
said Jose Maria Roldan, Europe's top
bank watchdog as head of the Committee
of European Banking Supervisors. "If
we could use (XBRL) as an international
standard for a financial entity which
operates in several European countries,
reporting to different authorities becomes
much easier," Roldan said.
Top European banking regulators gathered
last week at a global conference in
Madrid said they hoped that the XBRL
project could reduce the slow and politically
painstaking need to harmonize banking
laws across the 25-nation EU.
TECHNOLOGY TO THE RESCUE
Instead of treating financial information
as a block of text - as in a standard
Internet page or a printed document
- XBRL provides a computer-readable
specific identity tag for each item
of data. For example, net profit or
earnings per share have unique tags.
It can show how items on a profit and
loss account are related to one another,
how they are calculated or how they
are grouped for organisational purposes.
Roldan said XBRL was more time-and cost-efficient
because instead of having several methods
of data presentation, there is one which
fits all the requirements of an international
entity.
"We are proposing it as something
which will reduce costs both for the
Bank of Spain as well as for the banks,"
said Roldan, who is also the chairman
of the Spanish XBRL association and
head of regulation at the Bank of Spain.
"But it's probably premature to
talk about when it might become obligatory,"
he added.
The U.S. Securities and Exchange Commission
(SEC) has said recently that it would
consider making it compulsory for companies
to use XBRL, thereby helping SEC staff
and investors to quickly check and analyse
financial data.
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