The European Securities and Markets Authority
(ESMA) has found that Greek issuers are felling short of meeting
IFRS disclosure requirements in relation to the country’s sovereign
debt.
IFRS disclosure was particularly poor in
relation to transparency of gross exposure, maturities, valuation
methodologies and the impact of impairment on profit or loss,
according to ESMA.
The watchdog also raised concerns over the
level of clarity and transparency over credit default swaps and
whether issuers were buyers or sellers of these
instruments.
The ESMA review highlighted a lower level of
transparency regarding Greek government bonds that had been
reclassified as well as exposures to Greek non-sovereign debt.
ESMA chair Steven Maijoor said that although
the report only covers the accounting treatment of Greek sovereign
debt, its principles “should be applied to any material exposures
to financial instruments that become subject to enhanced risk.”
Maijoor added that this can contribute to the
protection of investors and promote stable markets.
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By GlobalDataESMA reviewed 42 European financial
institutions: 21 banks, five insurers and 16 combined banking and
insurance institutions.
