| Headline: Masters of opacity Source: Euromoney Date: February 2000 Editor: Peter Lee Which banks are good at telling their shareholders and counterparties about risks they are running and how they manage them? The answer is, none. Not one of the world's top global players discloses a satisfactory amount. Most feed pap to the readers of their annual reports about the nature of swaps and standard deviations without showing how they apply risk measurement to their own exposures, let alone saying what the numbers are. Geneva-based think-tank Ifci (International Finance & Commodities Institute) commissioned a study on bank disclosure based on their annual reports. Arthur Andersen volunteered to sift through the reports of 42 top international banks, including six top securities firms, and mark them according to an Ifci disclosure matrix (see below). The marking process was necessarily subjective, since it took into account language and explanations used. But the results send a strong, objective and depressing signal to the banks - they all fail to disclose enough, either because they haven't grasped the risks themselves, or because they are masters of opacity. The results were so poor that Ifci and Arthur Andersen decided not to publish a detailed scoresheet in the hope that the banks will voluntarily do better next time in their 1999 reports. |