(Reuters) - Global regulators called on banks to give investors more precise and relevant information about risks from next year or face mandatory rules.
"The importance to market confidence of useful disclosure by financial institutions of their risk exposures and risk management practices has been underscored in recent years," the Financial Stability Board said in a statement.
The FSB, a regulatory task force for the world's 20 leading economies (G20), set out steps it will take to improve disclosure practices for implementation from year-end 2012 annual reports.
The FSB will set up a working group comprising investors, firms and auditors to develop principles for better disclosure to be used in annual reports for 2012 and onwards.
"Should the follow-up actions by the private sector not result in sufficient progress in this area, the appropriate international standard-setting bodies will be asked to take forward work to consider principles," the FSB said.
Financial institutions already face regulatory and accounting requirements to make disclosures about risks such as those from currency movements and commodity markets but investors feel inundated with information of varying importance.
A roundtable of 80 senior officials from across the world in December hosted by the FSB revealed shortcomings which affect their purchase of bonds and shares in a financial firm.
Asset managers, investors and regulators said many firms provide only minimal risk disclosures or "obscure important information in voluminous disclosures that are not relevant or prioritized", the FSB said.
"Disclosures should better differentiate market risk components, for example interest rate, foreign currency and commodity risk as separate disclosure categories, and firms should avoid voluminous or boilerplate disclosures presented as a compliance exercise," the task force added.
The International Accounting Standards Board (IASB), which authorizes accounting rules used in over 100 countries, is set to make tackling "disclosure overload" a priority for its work program over the next year or two.
(Reporting by Huw Jones; Editing by Helen Massy-Beresford)
No comments:
Post a Comment