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Investors have mixed views on HSBC’s market risk disclosure changes

As part of the UK Financial Reporting Council's Financial Reporting Lab (FRL) a group of investors reviewing the changes to risk disclosure reporting by HSBC found mixed views on the changes applied.

The FRL report, Presentation of market risk disclosures, is based on HSBC's decision to change its risk disclosure presentation in the beginning of 2011.

This HSBC risk disclosure presentation moved recurring information into the appendix following the primary risk disclosure that focused on current period results and dynamic risk trends.

Half of the investors looking at the reporting changes made by HSBC said that the new way of risk reporting improved presentation and the other haft said it did not enhanced nor hindered the clarity and usability of the risk section of the annual report.

Regarding the content of risk disclosures, the investors stated the importance of tailoring the disclosures to fit the size and nature of a given bank's risks as well as the importance of being current and relevant concerning underlying risks and responses to key market events.

"The Lab is exploring various themes in reporting, including how to make relevant information more accessible, and the potential for reducing 'clutter'," FRL director Sue Harding explained.

"Investors welcome a focus on reducing the volume and complexity of reporting, while still conveying information proportionate to the underlying exposures," she said.

The FRL's review was carried out by 15 investors from seven institutions.

Related links

The Financial Reporting Council

Financial Reporting Lab project report: Presentation of market risk disclosures

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