Senior Supervisors Group Releases Report on Disclosure of Risky Exposures
Senior banking regulators from the United States and four European countries issued a report in April on the ways large financial services firms disclose exposures to financial instruments that the marketplace considers high risk.
The high-risk instruments the report examined include collateralized debt obligations (CDOs), residential mortgage-backed securities, commercial mortgage-backed securities, other special purpose entities, and leveraged finance.
The report is from the Senior Supervisors Group, which is composed of banking supervisory officials from the Federal Reserve Board of Governors, the Federal Reserve Bank of New York, the Office of the Comptroller of the Currency, the Securities and Exchange Commission, and regulatory agencies from France, Germany, Switzerland, and the United Kingdom.
Disclosures span broad cross-section
The disclosure practices noted in the report include
Disclosure improvements noted
The study took a broad view of disclosure; it includes not only information in public securities filings but also earnings press releases and accompanying information on firms' Web sites. Indeed, the report noted that some of the leading disclosure practices covered were contained in advance or supplementary material, which the report said can provide market participants with more timely information about exposures that could be a source of concern.
May 15, 2008