Bank Disclosures Under IFRS and Biases in the Risk Perception of Financial Instruments

Bischof, Jannis; Ebert, Michael

doi:10.2139/ssrn.1506966

Cited by 3 publications

(1 citation statement)

References 36 publications

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“…Indeed, it is worth noting that most of the previous studies on risk disclosure have mainly focused on non-financial companies, with particular regard to voluntary risk information, while mandatory risk disclosure provided by banks is still relatively under-researched (Oliveira et al, 2011a). Some authors attempt to evaluate the quality of banking risk disclosures in the annual reports (Bischof and Ebert, 2009;Helbok and Wagner, 2006), while others provide empirical investigations of the extent of banking risk disclosure in the annual reports by emphasizing the specificities of different country settings (Ariffin et al, 2009;Hossain, 2008;Frolov, 2006) or the factors that affect the voluntary risk-related disclosures (Oliveira et al, 2011b). Only a few studies address the changes that have taken place in banking risk reporting as a result of challenges in banking regulation.…”

Section: Introductionmentioning

confidence: 99%

(Un)useful risk disclosure: explanations from the Italian banks

Maffei

Aria

Fiondella

et al. 2014

Managerial Auditing Journal

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Purpose – The purpose of this paper is to better understand how mandatory risk categories are disclosed and to provide a better understanding of the reasons why risk disclosure looks less useful than it ought to be. Design/methodology/approach – We analyze how Italian banks provide risk information, by focusing on its characteristics to find out any differences between the notes to the financial statements and the public report, both prepared in compliance with the instructions of the Bank of Italy. We assess the risk-related reporting practices of 66 Italian banks, based on a content analysis of the two mandatory reports, and verify whether bank-specific factors explain any differences. Findings – Italian banks formally comply with the Bank of Italy’s instructions, but there is discretion to choose the characteristics of the information provided. Despite different risk categories to disclose in each report, disclosure is quite uniform, although banks tend to provide denser information in the notes to the financial statements and the difference in the economic signs between the two reports decreases as the level of risk increases. Practical implications – The significance of this study goes beyond the debate taking place in the academic arena, as it can be largely relevant for preparers, those responsible for setting international and national accounting standards, the Basel Committee on Banking Supervision and the domestic supervisory authorities, particularly concerning the possible introduction of requirements that are more explicit than the existing ones. Originality/value – The Italian setting is very relevant because unlike other countries, Italy adopts “interventionist enforcements”, which are regarded as a critical tool for achieving the minimum disclosure requirements. Moreover, the two sets of disclosure required by the Bank of Italy have never been investigated in a single data set.

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Section: Introductionmentioning

confidence: 99%

(Un)useful risk disclosure: explanations from the Italian banks

Maffei

Aria

Fiondella

et al. 2014

Managerial Auditing Journal

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Are Level 3 Fair Values Reflected in Firm Value? Evidence from European Banks

Kisseleva¹,

Lorenz²

2016

SSRN Journal

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The comparability of IFRS 7 in the European banking sector

Allini¹,

Ferri²,

Maffei³

et al. 2017

COC

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The aim of this paper is to investigate the level of comparability of the IFRS 7 Financial Instruments Disclosure in banks’ annual reports across different European countries (Italy, Spain, France, Germany and UK) from 2007 to 2014. The banking sector seems to be particularly concerned with the issue of financial risks, especially during the most recent global financial crisis. In addition, risk disclosure has led to vigorous debates at both the national and international levels among scholars and standard setters. To test the comparability across countries, we use the van der Tas C index. Our results show that there is a medium level of comparability. Despite the accounting boards’ and authorities’ commitment to regulating this information, there are still substantial differences in the practices of risk disclosure, which have negative effects on comparability. Our results show that an increase in the degree of comparability exists during the observed period but we are still far from a condition of full comparability due to the presence of factors other than regulations that may affect accounting practices. These findings could be helpful for the decisions of institutional regulatory bodies and for investors.

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Bank Disclosures Under IFRS and Biases in the Risk Perception of Financial Instruments

Cited by 3 publications

References 36 publications

(Un)useful risk disclosure: explanations from the Italian banks

(Un)useful risk disclosure: explanations from the Italian banks

Are Level 3 Fair Values Reflected in Firm Value? Evidence from European Banks

The comparability of IFRS 7 in the European banking sector

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