Banks’ financial disclosures during the financial crisis - Mazars - Ireland

Mazars has recently published a study on the theme: "The financial institutions credit in times of crisis.”

In response to the turbulence on the financial markets over the last year, the regulatory authorities have taken the following actions:

• the IASB published an amendment to IAS 39 in October 2008, which permits the reclassification of financial assets in certain circumstances;
• several documents were published which helped to clarify the concept of ‘inactive markets’ in the context of recognition of financial instruments at fair value. They were: the conclusions of the IASB’s Expert Advisory Panel in November 2008, a good practice report from the Committee of European Banking Supervisors in June 2008 and a joint recommendation from the AMF, CB, CNC and ACAM on October 15th 2008.

These changes in the recognition of financial instruments have been accompanied by a demand for more detailed financial disclosures on:

• the reclassification of financial instruments;
• risk management;
• management judgements made in calculating fair value.

These recommendations support those published in spring 2008 by the Senior Supervisors Group of the Financial Stability Forum, which recommended that financial establishments should disclose their exposure to certain products (detailed below), with effect from 30th June 2008 publications :

• collateralized debt obligations (CDOs);
• residential/ commercial mortgage-backed securities (RMBSs or CMBSs) ;
• special purpose entities (SPEs);
• leveraged finance (LBOs).

Mazars analysed the annual reports of fourteen banks for the year ending December 31st 2008. Two of them were American and twelve were European.

Benelux
Dexia
ING
England
Barclays
HSBC
France
BNP Paribas
Crédit Agricole
Caisse d’Epargne
Société Générale
Germany
Commerzbank
Italy
Unicredit
Spain
Santander
Switzerland
UBS
USA
Bank of America
Goldman Sachs

To view the findings of this survey by Mazars, download the document below.

• Banking_study_09.pdf 4.81 MB