Market Risk Reporting by the World's Top Banks: Evidence on the Diversity of Reporting Practice and the Implications for Accounting Harmonisation
37 Pages Posted: 22 Jan 2009 Last revised: 29 Jun 2009
Date Written: November 28, 2008
The increasing adoption of international accounting standards and global convergence of accounting regulations is frequently heralded as serving to reduce diversity in financial reporting practice. In a process said to be driven in large part by the interests of international business and global financial markets, one might expect the greatest degree of convergence to be found amongst the world's largest multinational financial corporations.
This paper challenges such claims and presumptions. Its content analysis of longitudinal data for the period 2000-2006 reveals substantial, on going diversity in the market risk disclosure practices, both numerical and narrative, of the world's top-25 banks. The significance of such findings is reinforced by the sheer scale of the banking sector's risk exposures that have been subsequently revealed in the current global financial crisis. The variations in disclosure practices documented in the paper apply both across and within national boundaries, leading to a firm conclusion that, at least in terms of market risk reporting, progress towards international harmonisation remains rather more apparent than real.
Keywords: market risk, risk reporting, world's top banks, accounting harmonisation
JEL Classification: G21, M41, M44, M47, N20
Suggested Citation: Suggested Citation