Survey of disclosures about trading and derivatives activities
6 November 1997
BASLE COMMITTEE ON BANKING SUPERVISION
BANK FOR INTERNATIONAL SETTLEMENTS, CH-4002 BASLE
The Basle Committee on Banking Supervision and the Technical Committee of the International Organisation of Securities Commissions (IOSCO) are today making public the results of a survey of the disclosures about trading and derivatives activities of large, internationally active banks and securities firms located in the G-10 countries and Hong Kong. This survey represents a continued effort by the two Committees to encourage banks and securities firms to provide market participants with sufficient information to understand the risks inherent in their trading and derivatives activities.
The survey reveals that the amount, detail and clarity of trading and derivatives-related disclosures in the annual reports of many banks and securities firms have improved over recent years. In particular, expanded discussions of operational and legal risks and the increase in the amount of quantitative disclosures about market risks are noted in 1996 annual reports. However, there are still some institutions that disclose little information about key aspects of their trading and derivatives activities. There also remain disparities, both within and across countries, as regards the type and usefulness of the information disclosed. Those banks and securities firms that, in some or more areas, fall short of conforming with the recommendations issued by the two Committees on meaningful quantitative and qualitative disclosures, are encouraged to consider these recommendations. In addition, all banks and securities firms should consider disclosure initiatives by other national and international bodies, and the types of disclosures provided by their peers at the international level.
The Basle Committee and the IOSCO Technical Committee will continue to monitor the disclosure practices of banks and securities firms over the coming years. Both Committees expect that institutions will continue to enhance, and where necessary expand, their disclosures in line with the growth in the level and complexity of their business activities.