Two CEBS reports on European bank disclosures

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25 Jun 2009

The Committee of European Banking Supervisors (CEBS) has published two reports assessing banks' disclosures (a) in their 2008 audited annual reports on activities and exposures affected by the financial crisis and (b) under Basel Committee Pillar 3 (market discipline). Assessment of 2008 annual report disclosures.

The analysis covers 23 large banks with cross-border activities. CEBS found 'a significant increase of disclosures compared to the previous analyses.... At the same time CEBS identifies a number of areas within the CEBS good practices – mostly in the context of accounting-related disclosures – where disclosures could be further improved, including disclosures on fair value measurement and related methodologies'. CEBS intends to develop a set of high-level disclosure principles to help banks prepare disclosures covering areas or activities that warrant particular attention or that are under stress.
  • Assessment of 2008 Pillar 3 disclosures. CEBS analysed the Pillar 3 disclosures provided by 25 banks relating to a bank's risk profile and capital adequacy. CEBS found that 'banks have notably enhanced the level of quantitative and qualitative information regarding credit risk and securitisation activities; however there are specific areas where further improvements could be made':
    • the composition and characteristics of own funds
    • the back testing information for credit risk and market risk
    • the quantitative information on credit risk mitigations and counterparty credit risk
    • the granularity of information on securitisations
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