Press Release: Financial services: Commission recommends greater disclosure of financial information in accounts

The European Commission has issued a Recommendation designed to broaden the scope of financial information that should be disclosed in the annual and consolidated accounts of banks and other financial institutions. It is important for the market to be aware of a financial institution's exposure to loss and the basis on which these exposures are managed and calculated. The Recommendation therefore suggests that annual accounts of financial institutions should give greater qualitative and quantitative information on institutions' activities in financial instruments, including derivatives, and on the objectives and methods of risk measurement and management systems. Public disclosure of accurate, timely and reliable information will help people make a more accurate assessment of an institution's financial performance and state of health, leading to better market discipline and increased investor confidence. This measure is part of the Financial Services Action Plan designed to create an integrated market in financial services, for which the Lisbon European Council set an implementation deadline of 2005.