EBA欧洲银行-Disclosure-principles_7页_189kb

Summary of Principles for Disclosures in Times of Stress

Introduction

The 2008-2009 financial crisis highlighted the importance of high-quality disclosures in maintaining market confidence. CEBS (Committee of European Banking Supervisors) developed a set of disclosure principles to guide financial institutions in providing timely, relevant, and meaningful information during periods of stress. These principles are based on lessons learned from the crisis and are intended to improve the substance, presentation, and internal consistency of disclosures, without increasing their volume.

Objective

The principles aim to:

• Guide financial institutions in preparing public disclosures during stress, either to comply with existing regulations or on an ad hoc basis.
• Enhance the quality of disclosures, especially in stressed situations, by focusing on clarity, completeness, and comparability.
• Encourage early adoption of new disclosure standards and ensure that external audit and internal verification processes are clearly communicated.

I. General Principles

1. Timely and Up-to-Date Information

   • Disclosures should be made promptly to avoid misleading users.
   • Extra communication documents may be necessary in case of material changes.
   • Regular reports should not be replaced by ad hoc disclosures.

2. Disclosure of Uncertainty

   • Financial institutions must clarify areas of uncertainty and their potential development.
   • Clear information on key estimates and management judgements is essential.
   • Use sensitivity analyses to explain assumptions and probabilities.

3. Comprehensive and Meaningful Information

   • Disclosures should be complete and relevant to allow meaningful assessment.
   • Provide contextual background on the economic environment.
   • Consider rolling forward or adapting previous disclosures as situations evolve.

4. Comparability Over Time and Between Institutions

   • Enhance time-based and cross-institutional comparability.
   • Use standardised formats and breakdowns by activity type, geography, or credit quality.
   • Provide pre- and post-hedging exposures and notional/carrying amounts for clarity.

5. Early Adoption of New Standards

   • Encourage early implementation of new disclosure regulations.
   • Disclose whether new standards have been adopted and the reasons behind the decision.

6. Transparency on Audit and Verification

   • Clearly state whether information has been reviewed or verified by external auditors.
   • Ensure adequate internal verification for public disclosure.

II. Content of Disclosures

7. Business Model and Significance of Activities

   • Provide background on the business model and involvement in stressed activities.
   • Explain the contribution of these activities to value creation.
   • Discuss changes in strategy or policies due to stress.

8. Impact on Results and Risk Exposures

   • Detail exposures, risks, and losses.
   • Include quantitative impact of risk mitigation measures.
   • Provide narrative comments on possible future developments.

9. Impact on Financial Position

   • Cover capital levels, solvency ratios, and liquidity positions.
   • Highlight recapitalisation measures in extreme cases.
   • If quantitative data is sensitive, ensure qualitative disclosures are sufficient.

10. Risk Management Practices

    • Describe risk management practices and governance arrangements.
    • Include specific measures to enhance risk control, including those implemented after the reporting date.
    • Avoid generic information and focus on relevant activities.

11. Accounting Policies and Judgements

    • Provide detailed accounting policies relevant to stressed areas.
    • Highlight changes in policies and significant judgements made.
    • Focus on specific situations, not recycled generic descriptions.

III. Presentational Issues

12. Easy Access to Disclosures

    • Disclosures should be grouped together in a specific section or communiqué.
    • Use cross-references to help users navigate to related information.
    • Institutional websites are recommended as the primary location for posting disclosures.

13. Appropriate Level of Granularity

    • Information should be disaggregated where necessary.
    • Ensure clarity and transparency without causing information overload.

14. Balance Between Quantitative and Narrative Information

    • Avoid generic or boilerplate disclosures that add quantity without quality.
    • Use tabular formats for clarity and narrative analysis to interpret data.
    • Encourage the use of illustrative tables and overviews.

15. Educational Approach

    • Use plain language and consistent terminology.
    • Provide explanations of technical terms to reduce ambiguity.
    • Include summaries or synopses to guide readers.

16. Disclosure of Non-Exposure

    • Clearly state if an institution is not exposed to certain activities.
    • This is decision-useful and should be highlighted when relevant.

Conclusion

These principles aim to improve the quality and relevance of disclosures during times of stress, ensuring that market participants can make informed decisions. They emphasize timeliness, transparency, comparability, and clarity, while avoiding unnecessary duplication or increase in disclosure volume. Financial institutions are encouraged to adapt their disclosures to reflect real-time conditions and to maintain consistency with existing regulatory frameworks.