Public Disclosures by Banks: Results of the 2001 Disclosure Survey

May 2003

Executive Summary

This publication of the results of the 2001 disclosure survey is part of the sustained effort by the Basel Committee on Banking Supervision (the Committee) to promote transparency and effective market discipline in the banking and capital markets.

The report aims to provide an overview of the disclosure practices of a sample of internationally active banks and to encourage these to further enhance transparency, especially in light of the coming implementation of the New Basel Capital Accord. Together with a similar survey conducted during the previous two years, the report also intends to highlight trends in the disclosure practices by banks.

The survey focuses on the annual reports of 54 banks representing a sample of internationally active banks headquartered in the Committee's member countries. It includes 104 questions addressing quantitative and qualitative disclosures in a number of categories: capital structure, capital adequacy, market risk internal modeling, internal and external ratings, credit risk modeling, securitisation activities, asset quality, credit derivatives and other credit enhancements, other derivatives, geographic and business lines diversification, accounting and presentation policies, and other risks.

The survey reveals that many banks have continued to expand the extent of their disclosures. Overall, in 2001, banks disclosed 63% of the items included in the survey, up from 59% in 2000 and 57% in 1999.

The main findings are the following:

In view of these results, the Committee encourages banks to further enhance the transparency of their use of credit risk mitigation techniques (including credit derivatives), asset securitisation and internal ratings, given that disclosure in these areas will be qualifying criteria for the recognition or use of these techniques under the New Basel Capital Accord.

Furthermore the few banks that do not disclose (compared to their peers) the most commonly provided disclosures are urged to improve these disclosures, which are already recommended under the existing disclosure guidance papers issued by the Committee and for the most part will be required under the New Basel Capital Accord.