EBA欧洲银行-Transparency_AR2009_32页_346kb

Summary of CEBS Assessment of Banks' Transparency in 2009 Audited Annual Reports

Core Content

This report by the Committee of European Banking Supervisors (CEBS) evaluates the transparency of European and some non-European banks in their 2009 audited annual reports. It is part of a continuing effort to assess how banks communicate the impact of the financial crisis on their financial situation and operations. The findings are based on a sample of 24 large European banks with cross-border activities, and a similar analysis on Pillar 3 disclosures is published in parallel.

The report highlights that, overall, the CEBS June 2008 good practices have been largely followed by banks. This is particularly evident in the areas of business models, risk management, and accounting policies, especially fair value measurement and credit impairment. However, there are still opportunities for improvement in the clarity and detail of certain disclosures.

Main Findings

1. Business Models

• Adequate disclosures: 71% of banks provided adequate descriptions of their business models.
• Improvement over previous years: 18% of banks improved their disclosures compared to 2008.
• Areas for improvement:
  • Fewer details on the implications of government support withdrawal.
  • More granularity on product types and qualifying criteria for investments.

2. Risks and Risk Management

• Adequate disclosures: 83% of banks provided adequate risk management information.
• Improvement over previous years: 23% of banks improved their disclosures on risk management.
• Key improvements:
  • Regular stress testing was mentioned by most banks.
  • Some banks included quantitative information on liquidity ratios for the first time.
• Best practices:
  • Clear executive summaries highlighting key risk areas (e.g. Santander).
  • Comprehensive discussion of the impact of market turmoil (e.g. HSBC).

3. Accounting Policies

• Valuation issues:
  • 58% of banks had room for improvement in fair value disclosures.
  • 38% provided adequate information.
  • Fair value hierarchy: Most banks disclosed the three levels, but explanations on classification criteria and transfers between levels were lacking.
  • Level 3 disclosures and sensitivity analysis: Banks provided detailed information on level 3 instruments, but sensitivity analyses were generally generic and could be more specific.
  • Valuation techniques: Banks often described techniques in a general manner, with opportunities for more detailed methods and assumptions.

4. Areas for Improvement

• Fair value disclosures: Lack of clarity on classification criteria and transfers between levels.
• Impairment disclosures: Heterogeneous and often not specific enough, especially regarding methodologies for collective impairment.
• Reclassifications: Often too generic, with insufficient detail on reasons for reclassifications.
• Consolidation and derecognition: More detailed information on the risks and rewards test and its results would be beneficial.
• Disclosures on activities under stress: More detailed and accentuated information is needed on specific activities such as consumer lending and private equity investments.
• Remuneration disclosures: Significant improvements are needed, particularly in quantitative disclosures for staff with material risk impact.

Methodology and Approach

• CEBS used a benchmark list based on its June 2008 good practices.
• Scoring system:
  • N/A: Not applicable.
  • 0: No information disclosed.
  • 1: Insufficient information.
  • 2: Disclosure could be improved.
  • 3: Disclosure adequate.
• Sample size: 24 European banks (23 EU, 1 Swiss), with some comparison to non-European banks (e.g., US institutions).
• National supervisors were involved in the assessment, with feedback provided to institutions.
• Best practice examples were identified across varying levels of disclosure detail, showing that quality is not necessarily linked to quantity.

Presentation and Structure

• Heterogeneity in disclosure structure and presentation was noted.
• Clarity and comparability were key concerns, especially in the context of cross-border comparisons.
• CEBS recommends improving the consistency and structure of disclosures to enhance transparency and comparability.

Conclusion

CEBS identified best practice examples in various areas, which are not exhaustive but are considered particularly useful for improving comparability. The report reflects a continued commitment to enhancing bank transparency, especially in the context of evolving economic conditions and regulatory requirements. CEBS will continue to monitor and assess banks' disclosures in the future.

Key Recommendations

• Improve clarity and detail in fair value and impairment disclosures.
• Enhance specificity in reclassifications and consolidation practices.
• Provide more detailed and accentuated disclosures on activities under stress.
• Strengthen remuneration disclosures, especially quantitative information.
• Increase consistency and comparability through better structure and presentation.