New reporting template to hit banks next year

Julian Harris
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INTERNATIONAL regulators said yesterday that banks must reveal “all the components” of their capital from 30 June next year, as their progress in building up buffers is monitored by authorities.

The Basel Committee on Banking Supervision – which consists of regulators from 27 countries including the UK, Germany, China and the US – wants to ensure that lenders are falling in line with new Basel III rules.

Regulators are attempting to enforce a strict template on banks, claiming that reports over capital levels have previously been obscured by a lack of a clear and uniform system.

“During the financial crisis, market participants and supervisors were hampered in their efforts to undertake detailed assessments of banks’ capital positions and make comparisons across jurisdictions,” the committee said. “Adding to these difficulties were insufficiently detailed disclosure by banks and a lack of consistency in reporting across banks and jurisdictions.”

The report claims that the uncertainty may have made regulators’ jobs tougher during the financial crisis and “masked how far banks were relying on forms of capital that were insufficiently loss-absorbant”.

The decision to go ahead with the plans is likely to provoke dissent from banks, who have previously complained over the burden of the new requirements. “We find that the level of detail called for in the consultative document is clearly excessive,” the Association of German Banks said earlier this year, arguing that “the amount and complexity of the data” required will in fact make it even more difficult to comprehend.