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Responding to the EDTF recommendations: A review of 2012 year end reporting

Published on: 13 Aug 2013

This publication from Deloitte (UK) reviews the implementation of the 32 recommendations included in the October 2012 Enhanced Disclosure Task Force (EDTF) Report Enhancing the Risk Disclosure of Banks by banks that were members of the EDTF Working Group . The report also highlights examples of good practice for others to consider in their 2013 planning.

Key findings of survey are that in six areas banks have at least to a degree adopted the recommendations while in six other areas further improvements are yet to be implemented.

The main areas in which the banks reviewed have more consistently adopted the recommendations are:

  • information on regulatory capital including risk weighted asset (RWA) information at the consolidated level and the inclusion of a reconciliation between accounting and regulatory capital;
  • combined annual reports and pillar 3 reports or publication of both reports simultaneously;
  • details of principal risks and uncertainties;
  • risk governance structures;
  • credit risk disclosure for specific portfolios or exposure types; and
  • the application more generally of the qualitative recommendations.

Areas that still leave room for further developments in disclosures are:

  • the more widespread inclusion of liquidity and funding measures such as the Net Stable Funding Ration (NSFR) and the Liquidity Coverage Ratio (LCR);
  • the inclusion of overall risk appetite metrics and how banks have performed against these;
  • quantitative information in respect of market risk, particularly around sensitivity information and back testing details and exceptions;
  • stress testing information across many areas including market risk, funding and liquidity;
  • consistency in the inclusion of disclosures on asset encumbrance including quantitative detail; and
  • consolidating information currently in various sections of the annual report and reducing the volume of disclosures that are not material, to help improve clarity and reduce clutter.

Please click to download the survey.

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