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The importance to market confidence of useful disclosure by financial institutions of their risk exposures and risk management practices has been underscored in recent years, and the FSB mentioned, in its press release on 20 March 2012, that it will facilitate the formation of a private-sector task force to develop principles for improved disclosures.
The FSB is pleased to announce that the Enhanced Disclosure Task Force (EDTF) has been established. The co-chairs of the EDTF are: Hugo Bänziger, Chief Risk Officer and Member of the Management Board, Deutsche Bank; Russell Picot, Group General Manager and Group Chief Accounting Officer, HSBC Holdings plc; and Christian Stracke, Managing Director, Member of Investment Committee, and Global Head of Credit Research Group, PIMCO. In addition to the co-chairs, the EDTF initially has 25 senior officials and experts representing financial institutions, investors and analysts, credit rating agencies, and external auditors. Summary biographies of the co-chairs and a listing of the task force’s initial participants are shown in the annex to this press release.
The primary objectives of the EDTF are (i) to develop principles for enhanced disclosures, based on current market conditions and risks, including ways to enhance the comparability of disclosures, and (ii) to identify leading practice risk disclosures presented in annual reports for end-year 2011 based on broad risk areas such as those identified in the summary of the first FSB roundtable on risk disclosures held in December 2011.
The EDTF will have dialogue with standard-setting bodies, such as the International Organization of Securities Commissions, the Basel Committee on Banking Supervision, the International Association of Insurance Supervisors, the International Accounting Standards Board, the US Financial Accounting Standards Board, and the International Auditing and Assurance Standards Board, at key stages as it develops its recommendations.
The recommendations of the EDTF are expected to be reported to the FSB and published during October 2012. The FSB will consider holding another international roundtable by end-2012 to facilitate further discussion by investors, financial institutions, auditors, standard setters, regulators and supervisors on market conditions and risks at that time and the progress toward improving the transparency of risks and risk management through relevant disclosures.
Mark Carney, Chairman, FSB, said “We welcome the formation of the Enhanced Disclosure Task Force”. He added “The FSB supports these efforts which, together with the activities of standard setters, are expected to result in improved risk disclosure practices by financial institutions that will provide timely and useful information to investors”.
Notes to editors
The 20 March 2012 FSB press release on Improving Financial Institution Risk Disclosures and Next Steps is available at www.financialstabilityboard.org/press/pr_120320.pdf.
The FSB has been established to coordinate at the international level the work of national financial authorities and international standard setting bodies and to develop and promote the implementation of effective regulatory, supervisory and other financial sector policies in the interest of financial stability. It brings together national authorities responsible for financial
stability in 24 countries and jurisdictions, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts.
The FSB is chaired by Mark Carney, Governor of the Bank of Canada. Its Secretariat is located in Basel, Switzerland, and hosted by the Bank for International Settlements.
For further information on the FSB, visit the FSB website, www.financialstabilityboard.org.