Consultation Paper on Bank Disclosures

The Committee of European Banking Supervisors (CEBS) has issued a consultation paper proposing disclosure guidelines intended to help financial institutions improve their risk disclosures in the wake of the financial crisis. The disclosure guidelines are divided into three parts viz.

(1) guidance on presentational aspects of disclosure,

(2) general principles to be applied to high quality disclosures, and

(3) principles dealing with the content of disclosures on areas or activities under stress, in particular business models, impacts on results, risk exposures, impacts on financial positions, risk management, and sensitive accounting issues

SECP grants Relaxation of IAS 39

The Securities and Exchange Commission of Pakistan (SECP) has granted ’relaxation’ in the requirements of IAS 39 by allowing impairment losses on available-forsale (AFS) equity securities to be charged against equity, rather than against profit or loss, as IAS 39 requires। The ’relaxation’ is valid till 31st December 2009. The ’relaxation’ has been granted in response to requests from various financial institutions, including mutual funds, insurance companies, leasing companies, banks, and the corporate sector in general. The SECP said it granted the relaxation because recognizing impairment losses on AFS equity securities through profit or loss ’will not reflect the correct financial performance of the corporate entities’. The SECP’s announcement said that ’those companies who are willing to follow the full requirements of IAS 39 are encouraged to do so’.