As the economic crisis play out in Europe, an important question for investors is how sovereign debt exposure may have affected the recently reported performance of systemically important banks.
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Vincent Papa is a director of financial reporting policy for CFA Institute. He is responsible for representing the interests of CFA Institute on financial reporting proposals before the International Accounting Standards Board (IASB) and the U.S. Financial Accounting Standards Board (FASB).
It remains challenging for investors to fully anticipate the consequences of forthcoming bank regulatory requirements, especially across interrelated strands of regulation. A case in point is a Basel III requirement eliminating filters relating to financial reporting information. Read more
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The underperformance of major global banking stocks since 2007 is, in part, indicative of the belated recognition by investors that banks had for too long been too highly leveraged. Adequate loss-absorbing equity capital is necessary to ensure the solvency and financial stability of banking institutions. Read more
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With the corporate earnings season heading into the home stretch, it’s an ideal opportunity to examine whether users of financial statements — investors and securities regulators — have learnt lessons from the recent misreporting by corporations and are now effectively judging the earnings quality of reporting companies. Read more
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In a recently published issue brief, CFA Institute examines the impact of IFRS 13 Fair Value Measurement on the reporting of derivatives counterparty risk, including highlights of areas where information deficiencies currently exist and how IFRS 13 may improve transparency around CCR. Read more
1 Comment The need for better risk disclosures has been evident throughout the financial crisis. From the standpoint of investors and bank counterparties, the ongoing high cost of borrowing alongside difficulties that many banks still face when accessing different funding markets reflect the opacity surrounding bank institutions’ risk profiles. Read more
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Opponents of fair-value accounting were particularly voluble during the subprime mortgage-triggered credit crisis. But did they overstate their case? Vincent Papa, PhD, CFA, takes a look at the evidence. Read more
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