Global banking regulators are proposing new disclosure requirements for banks that aim to improve the transparency and comparability of bank capital positions.
The Basel Committee on Banking Supervision has published proposed new disclosure requirements that are designed to improve the transparency of regulatory capital and enhance market discipline, along with efforts to improve the quantity and quality of capital.
During the financial crisis, both firms and regulators were hampered in assessing the capital positions of banks due to both insufficiently detailed disclosure and a lack of consistency in reporting between banks and across jurisdictions. “A lack of clarity on the quality of capital may have contributed to uncertainty during the financial crisis,” it says.
The Basel Committee is proposing that banks comply with the disclosure requirements in their first set of financial statements after January 2013, and that they publish this disclosure with the same frequency as their financial statements. Ultimately, it believes that internationally-active banks across should be required to publish their capital positions according to common templates, which it proposes that banks begin using when the transition period for the phasing-in of deductions ends in January 2018.
The Basel Committee is seeking comments on the proposals by February 17, 2012.