TEXT-S&P rpt:A case for more disclosure, transparency from US banks

Tue Dec 11, 2012 9:22am EST

Dec 11 - Standard & Poor's Ratings Services believes that investors in financial institutions are best served when they can base their decisions on an analysis of data that are consistently and transparently presented and have uniform definitions of critical financial measures. We find that current U.S. bank disclosures lack completeness, transparency, and consistency, which impedes financial analysis and hinders greater confidence and stability in the industry.

In the article, titled "A Case For Greater Disclosure, Transparency, And Uniformity In U.S. Banks' Financial Reporting," we take a look at a few of the areas where we believe U.S. financial institutions can enhance their public disclosures almost immediately.

"Given that banking is essential to an interconnected global economy, more transparent and detailed disclosures are necessary, in our view," said Standard & Poor's credit analyst Stuart Plesser.

Some key areas where we believe U.S. publicly available financial disclosures may be improved include loan loss reserves by category, assumptions behind loan reserve calculations and loss estimation, loan-to-value ratios for real estate portfolios, refreshed data on troubled debt restructurings, consistent value at risk disclosure, and investment portfolio details.

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