2014年-EBA欧洲银行管理局_20080618a_transparency_21页_318kb

CEBS Report Summary on Banks' Transparency

Executive Summary

CEBS conducted an assessment of banks' public disclosures on securitisation operations, structured products, and illiquid assets affected by the recent market turmoil, in response to a request from ECOFIN and the Financial Stability Table of the Economic and Financial Committee (EFC-FST). The analysis covered disclosures made in the 4th quarter of 2007 and preliminary full-year results, as well as audited annual reports of 2007 from 22 large banks (19 from the EU, 3 from non-EU countries).

The report found that while banks generally provided adequate information on the impact of the market turmoil and their exposures, there were notable shortcomings in disclosures regarding the business models and risk management practices, particularly liquidity risk. Disclosures on accounting policies and valuation were often generic, and the presentation varied significantly.

CEBS identified a set of good disclosure practices that should be adopted by banks to enhance transparency. These practices are aligned with the Financial Stability Forum (FSF) recommendations and the Senior Supervisors Group (SSG) guidelines, but they also develop and supplement them. The report emphasizes the importance of a holistic approach to disclosure, which should "tell a coherent story" about the activities, their impact, and their management.

CEBS recommends that these good practices be applied in upcoming disclosures, with the extent of compliance depending on the bank's level of involvement in the affected activities. The report also highlights the need for follow-up assessments to ensure the effectiveness of these disclosures over time.

Main Findings

• Limited disclosure on business models and risk management: Most banks provided only general information on their business models and risk management practices, especially liquidity risk.
• Diverse disclosures on exposures and impact: Banks varied in the level of detail and presentation of their exposures and the impact of the crisis.
• Generic information on valuation and accounting: Valuation and accounting disclosures were often not specific enough to reflect the true nature of the market turmoil.
• Varied presentation of disclosures: The format and structure of disclosures differed significantly across institutions.

Observed Good Practices

CEBS identified the following good practices for disclosures on activities affected by the market turmoil:

• Comprehensive information on business model and risk management: Including a discussion of the types of instruments involved, the role of the institution, and the risks incurred and managed.
• Meaningful information on exposures and impacts: With appropriate levels of granularity, such as by type of product, geographic origin, and credit quality.
• Useful disclosures on accounting policies: Including a breakdown of exposures by nominal amounts, fair values, and related credit protection.
• Improved presentation of disclosures: Ensuring clarity and coherence in the narrative provided.

Recommendations

• CEBS recommends that all banks adopt the observed good practices in their upcoming disclosures.
• The application of these practices should be commensurate with the bank's exposure and involvement in the affected activities.
• The report suggests that the practices should be continuously reviewed and updated as the market evolves.

Follow-up

• CEBS plans to conduct a follow-up review of disclosures following the publication of mid-year results.
• The findings will inform any further measures to assess the effectiveness of the recommendations.

Methodology

• CEBS used a staged approach, analyzing disclosures from 2007 4th quarter and preliminary full-year results, as well as audited annual reports.
• The analysis was based on a list of possible disclosure topics and items, reflecting requirements from IFRS 7 and Directive 2006/48/EC.
• The report includes a comprehensive discussion of the findings against the observed good practices and provides guidance on their application.

Conclusion

• The report concludes that while there is room for improvement in the transparency of banks' disclosures, the observed good practices offer a solid foundation for enhancing clarity and comprehensiveness.
• These practices should be considered by all banks, even though not every bank may need to comply with all aspects.
• The report emphasizes the importance of a coherent and detailed narrative in disclosures to help stakeholders understand the background, impact, and management of the activities affected by the market turmoil.