Mazars survey : Banks' financial disclosures during the financial crisis

Mazars has analysed the annual reports, as of 31 December 2008, of fourteen credit institutions, two American and twelve European.

In the continuation of a first study published in 2008 on "The first application of IFRS 7 in the financial reporting of credit institutions in Europe",
Mazars has published now a study on the theme: "The financial institutions credit in times of crisis. »
In response to the turbulence on the financial markets over the last months, the regulatory authorities have taken the following actions:

  • the IASB published an amendment to IAS 39 in October 2008, which permits the reclassification of financial assets in certain circumstances;
  • several documents were published which helped to clarify the concept of ‘inactive markets’ in the context of recognition of financial instruments at fair value. They were: the conclusions of the IASB’s Expert Advisory Panel in November 2008, a good practice report from the Committee of European Banking Supervisors in June 2008 and a joint recommendation from the AMF, CB, CNC and ACAM on October 15th 2008.

These developments in the recognition of financial instruments have been accompanied by a demand for more detailed financial disclosures on:

  • the reclassification of financial instruments;
  • the risk management;
  • the management judgements made in calculating fair value.

These recommendations support those published in spring 2008 by the Senior Supervisors Group of the Financial Stability Forum, which recommended that financial establishments should disclose their exposure to certain products (detailed below), with effect from 30th June 2008 publications :

  • collateralized debt obligations (CDOs);
  • residential/ commercial mortgage-backed securities (RMBSs or CMBSs) ;
  • special purpose entities (SPEs);
  • leveraged finance (LBOs).

To view the findings of this survey by Mazars, download the document below.

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