Banks 'making progress' on disclosure

Original news:

Significant progress has been made in implementing the recommendations of the Financial Stability Board's (FSB) Enhanced Disclosure Task Force (EDTF), a new report concludes. Overall, participating banks have disclosed 73% of the information recommended by the EDTF in 2013, but the EDTF says more work can be done. The report includes a survey of globally systemically-important banks and certain domestic systemically-important banks. It also contains a review by a user group of the investor members of selected EDTF disclosures. The results highlight a gap between the users' assessment and the banks' own self-assessment.

Background

The EDTF was created by the FSB in 2012 to develop principles for enhanced disclosure, based on current market conditions and risks, including means to improve comparability of disclosures. It was also tasked with identifying leading practice risk disclosures presented in annual reports.

Report

This is the second progress report assessing the implementation in major banks' 2013 annual reports of the recommendations made in the EDTF's 2012 report, Enhancing the Risk Disclosures of Banks. Key findings include:

  • banks' self-assessment shows they have disclosed 73% of the information set out by the EDTF
  • there was particular improvement in quantitative disclosures, where the implementation rate increased from 40% to 70% on an aggregate basis
  • the user group assessment concludes 79% of the recommendations reviewed are fully (50%) or partially implemented (29%) across all 41 of the banks which participated in the survey
  • for banks participating in the survey for the second time, the user group assessment score has significantly increased, with the group assigning a 45% fully implemented rate compared to 16% in 2013
  • the results show a gap between the users' assessment and the banks' own self-assessment

In addition, the user group confirmed that banks in the UK and Canada have fully implemented the overwhelming majority of the recommendations (89% and 82%, respectively). Implementation rates are lower and differences between the bank and user assessments are considerably wider in the US and parts of Europe where national regulators have been less active in promoting adoption.

Next steps

The FSB encourages banks to continue to strive to improve risk disclosures, and calls on supervisory authorities to take further steps to foster awareness of the EDTF Principles and Recommendations by banks and markets

The FSB has asked the EDTF to undertake another survey in 2015, of the level and quality of disclosures in 2014 annual reports.

Source: Report: Enhanced Disclosure Task Force--2014 progress report

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