|For immediate release|
As part of its ongoing work to improve risk management standards in banks, the Basle Committee on Banking Supervision (Basle Committee) issued today two papers entitled Enhancing Bank Transparency and Operational Risk Management.
The first paper on bank transparency gives guidelines to banks and bank supervisors on public disclosures in bank financial reports. The paper recommends that banks make meaningful disclosure in six broad areas: financial performance; financial position (including capital, solvency and liquidity); risk management strategies and practices; risk exposures (including credit risk, market risk, liquidity risk, and operational, legal and other risks); accounting policies; and basic business, management and corporate governance information. The Basle Committee strongly recommends that banks address these categories in their financial reports and other disclosures to the public. Within each broad area, significant detail in disclosures may be required, depending in part on the institution's activities.
The second paper on operational risk management makes public the results of recent interviews with major banks in the G-10 countries on their management of operational risk. The purpose of these interviews was to assess the current state of art of operational risk management. The survey results indicate that, while senior management's awareness of operational risk has been increasing, most banks are only in the early stages of developing a framework for measuring and monitoring operational risk. The Basle Committee intends to continue monitoring developments in this area.
The text of these reports can be obtained from the Bank of International Settlements (BIS) Web Site on the Internet (http://www.bis.org). They are also available from the Basle Committee's Secretariat at the BIS and from the Basle Committee member bank supervisory authorities and central banks.
1998 Banking and consumer regulatory policy