What Constitutes Appropriate Disclosure for a Financial Conglomerate?
34 Pages Posted: 11 Nov 2008
There are 2 versions of this paper
What Constitutes Appropriate Disclosure for a Financial Conglomerate?
Date Written: November 2002
Abstract
This paper addresses the disclosure issues for financial conglomerates principally from the same perspective as that of the Basel Committee on Banking Supervision: that disclosure is important for the safety and soundness of banks. However, we reach substantially different conclusions with respect to three important disclosure issues: the role of market value accounting; the frequency of disclosures; and the role of subordinated debt.We start by asking why any special disclosure might be required for financial conglomerates. This question immediately leads to a discussion of what is special about financial conglomerates. We also address the question of, "Disclosure to whom?" There are at least two potential audiences for information disclosures: financial regulators; and the publicinvestors/creditors/customers of a financial conglomerate. Issues of the appropriate structure for a financial conglomerate, and the information revelation that should accompany that structure, are also raised. Finally, we return to the title topic: What constitutes appropriate disclosure for afinancial conglomerate. Unfortunately, by turning its back on the three most important steps that could be taken to improve information disclosure -- mandating market value accounting (MVA) for banks' reports to regulators, aiming toward daily submission of these reports, and requiring the issuance of subordinated debt -- the Basel Committee has fundamentally undermined its efforts to enhancebanks' safety and soundness.
Keywords: Banks, Disclosure, Regulation, Basel II, Market Value Accounting, Subordinated Debt
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Paying Less for Real Estate Brokerage: What Can Make it Happen?
By Robert W. Hahn, Robert E. Litan, ...
-
Alternative Forms of Mixing Banking with Commerce: Evidence from American History
-
The Residential Real Estate Brokerage Industry: What Would More Vigorous Competition Look Like?
-
The Residential Real Estate Brokerage Industry: What Would More Vigorous Competition Look Like?
-
What Constitutes Appropriate Disclosure for a Financial Conglomerate?
-
Technology and Real Estate Brokerage Firm Financial Performance
By John D. Benjamin, Peter T. Chinloy, ...
-
Financial Regulation and the Current Crisis: A Guide for the Antitrust Community
-
The Growing Influence of Economics and Economists on Antitrust: An Extended Discussion