Recommendations of Working Group on Public Disclosure

Article excerpt

A private-sector working group on January 11, 2001, recommended enhanced and more frequent public disclosure of financial information by banking and securities organizations.

Market risk information previously disclosed annually should be disclosed quarterly, and the content of these disclosures should be improved, the group said. Additional credit risk information on wholesale credit exposures should also be made available quarterly, it said.

The Working Group on Public Disclosure, established in April 2000 by the Board of Governors of the Federal Reserve System, was chaired by Walter V. Shipley, retired chairman of Chase Manhattan Bank. He delivered the group's findings in a letter to Board member Laurence H. Meyer. Copies were provided to the Comptroller of the Currency John D. Hawke, Jr., and Securities and Exchange Commission Chairman Arthur Levitt, Jr. The OCC and SEC participated with the Board in support of the effort.

In addition to calling for more frequent public disclosure, the working group said that financial information should be disclosed based on a firm's internal methodologies and exposure categories. It said that quantitative information on a firm's risk exposure should be balanced with qualitative information describing its risk-management process. Public disclosures should vary among institutions to reflect legitimate differences in internal management processes, and disclosure practices should change in step with innovations in firms' risk-management and measurement practices, the group said. …