In reflection of their desire to respond to market expectations, seven lending institutions in the UK and British Bankers’ Association (BBA) have agreed to the inclusion of the draft BBA code in a Financial Services Authority (FSA) discussion paper on financial reporting disclosures. A key element of the commitment is the codification and formalisation of existing practice to enhance the comparability of disclosures between institutions.
The FSA discussion paper ‘Enhancing financial reporting disclosures by UK credit institutions’ takes stock of developments in financial reporting disclosure since the onset of the financial turmoil. It sets out the FSA’s views on the future evolution of UK banks’ financial reporting disclosures and how the current level of disclosure can be maintained and the comparability between disclosures enhanced. It presents two options for consultation, the imposition of mandatory standard disclosure templates for all UK banks or the industry led adoption of the draft BBA code.
Paul Chisnall, executive director for financial policy and operations at BBA, said: “We firmly believe that the draft BBA Disclosure Code included in the FSA discussion paper for comment will provide users of financial reporting with more useful and meaningful information than one size fits all FSA disclosure templates which, by their very nature, will only have limited relevance to the business models and mixes of each institution. I expect market participants to take a similar view, and look forward to discussing feedback on the draft Code with users in the coming months.”
