BIS wants more disclosure
Banks may have to disclose more portfolio data and in a more consistent fashion if options mooted by the Basel Committee on Banking Supervision are adopted.A BIS discussion paper released this week looks at "the complexity and the comparability of capital adequacy ratios across banks and jurisdictions."In essence, it attempts to address industry gripes on the simplistic and misleading comparisons drawn by some analysts who do not always allow for differences in reporting by banks in different countries.The BIS said that "one of the fundamental problems to have emerged in recent years is the difficulty that investors face in comparing risk-weighted assets across banks and over time."The BIS said: "The most direct way of tackling this problem would be to improve transparency to give investors the information they need to make such comparisons, including the drivers of changes in risk-weighted assets, and especially those affecting risk-weighted assets derived from internal models. "Feedback suggests, however, that in its current form, Pillar 3 has not adequately met the needs of investors and counterparties."