Option of information
THE LENDER of England, in its December 2009 Financial Stability Report, discussed banks’ disclosure practices and said that “better information could have constrained excessive risk-taking behaviour in the run-up to the crisis” (Bank of England 2009). And it suggested that UK banks were behind their international peers in this regard. From the Report, we are able to identify five areas where significant improvements in reporting information will be desirable:
- funding risk;
- group structure;
- valuation methods;
- intra-annual information; and
- financial interconnections. 1
Internationally, and recently, these areas are also highlighted by the Enhanced Disclosure Task Force (EDTF 2012), an exclusive sector initiative which recommendations have already been endorsed by the Financial Stability Board.