The fourth chapter of the OECD Principles of Corporate Governance endorsed by the OECD council in 1999 is solely devoted to Transparency and Disclosure. Market transparency is a simple concept that brings huge private and public rewards. Adoption of good disclosure practices makes the financial markets fair and thus encourages people to invest their savings.
Basel Committee, Paper «Enhancing bank transparency», September 1998 To achieve transparency a bank, in its financial reports and other disclosures to the public, should provide timely information on key factors affecting market participants’ assessment of banks. Basel Committee sets forth the following six broad categories of information, each of which should be addressed in clear […]
In the MD&A, banks disclose the potential impact of currently known trends, events and uncertainties that are reasonably likely to have material effects on a bank’s financial condition or results of operations. Irrespective of the terminology used in different countries to describe this type of disclosure, this qualitative information about operations and financial conditions is […]
Risk management has become a key factor in assessing the future performance and condition of a bank and the effectiveness of management. Disclosures may include discussions of overall risk management philosophy, overall policy and methodologies, how risks arise, how risks are managed and controlled, and whether and how derivatives are used to manage risks.
Interest rate risk is the risk of loss resulting from changes in interest rates. It is controlled primarily through the limit structure described in above. Exposure to interest rate movements can be expressed for all interest rate sensitive positions, whether marked to market or subject to accrual accounting, as the impact on their fair values […]
We have created what we call our «Funding Matrix», on which we have mapped all of our funding relevant assets and liabilities in time buckets corresponding to their maturities. Given that trading assets are typically more liquid than their contractual maturities suggest, we have divided them into liquids (assigned to the time bucket one year […]
Disclosure of financial position provides information on the bank’s ability to meet its obligations and commitments. It is a picture of the nature and amount of assets, liabilities, shareholders’ funds by type. It typically includes the balance sheet, information about an off-balance sheet items and statement of changes in shareholders’ equity.
