30 September 2014

FSB welcomes Second Implementation Progress Report by the EDTF

The FSB welcomes the publication of the second progress report by the EDTF which assesses the implementation in major banks' 2013 annual reports of the recommendations made in the EDTF's 2012 report 'Enhancing the Risk Disclosures of Banks'.

The EDTF's principles and recommendations for improved bank risk disclosures and leading disclosure practices are designed to provide relevant and timely information to investors and other users, which can contribute, over time, to improved market confidence in financial institutions. The FSB views the principles and recommendations as a valuable step to improve the quality of risk disclosures.

The survey results confirm that significant progress has been made towards implementing the EDTF recommendations in 2013 disclosures. The banks' self-assessment is that they have disclosed 73% of the information set out in the EDTF Recommendations, a substantial increase from 2012, with particular improvement in quantitative disclosures, where the implementation rate increased from 40% to 70% on an aggregate basis.

As in the 2013 survey, investors and analysts (the User Group) within the EDTF undertook a further review of the disclosures. This assessment confirmed that banks have made substantial progress in implementing the EDTF recommendations over the past year, although there is still a gap between the users' assessment and the banks' own self-assessment. The User Group assessed 50% of the recommendations reviewed as being fully implemented and 29% partly implemented. They also noted that levels of implementation were highest in countries where regulators have been most active in promoting adoption.

The FSB encourages banks to continue to strive to improve risk disclosures, and calls on supervisory authorities to take further steps to foster awareness of the EDTF Principles and Recommendations by banks and markets in their national jurisdictions, to continue to assist in strengthening confidence of investors and other stakeholders in banks' reporting. The EDTF noted the proposed changes to the Basel Committee's Pillar 3 and the implementation of the new IASB and FASB financial instrument standards as steps that will lead to further changes in disclosures, and suggested that a review and updating of the EDTF recommendations may be necessary in the future. The EDTF is an important driver for continuing improvement in risk disclosures, and the FSB has asked the EDTF to undertake another survey in 2015, of the level and quality of disclosures in 2014 annual reports. 

Press release

 

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