Despite some improvements, the world's largest banks still withhold too much information on their derivatives holdings, according to a report issued Wednesday by international banking and securities regulators.
The Basel Committee on Banking Supervision and the International Organization of Securities Commissions surveyed disclosure practices in 1996 by 79 firms. All were active internationally, and they held a combined $83 trillion in notional amount of derivatives.
The regulators found few banks explained whether their risk-management models worked or disclosed how much trading income was at risk during the year. They also said there was little consistency in the disclosures among banks in the G-10 countries.
Still, regulators found some improvements. More than half of the banks explained in their annual reports the operational and legal risks associated with their portfolios. That is up from 13% in 1993.
Also, 82% of banks explained how they value derivative holdings, up from 33% in 1993.
-Jaret Seiberg
