Title: Market risk reporting in banking overcoming the limits of IAS/IFRS and Basel regulation
Author: Salvatore Polizzi
Address: Department of Economics, Business and Statistics, University of Palermo, Viale delle Scienze, 90128, Palermo, Italy
Abstract: Market risk in banking activity is becoming a more severe issue day by day for several reasons. Analysing it from a regulatory point of view is fundamental for assessing whether or not banks are in the conditions of disclosing a satisfactory degree of information about their market risk exposure. The two regulatory constraints to consider are International Accounting Standards (IAS/IFRS) and the Basel regulation. Both of them seem to put too many constraints on banks. They turn out to be over-over-regulated. Even if regulators put many efforts in trying to provide a useful regulation for banks' risk reporting and capital adequacy, we are still far from a good regulation. The regulatory process for banks must be an ongoing and evolutionary one, but probably, it is not enough. A possible solution to this issue could be giving a greater importance to the supervisory function, rather than imposing additional constraints.
Keywords: market risk reporting; Basel regulation; IAS/IFRS; International Accounting Standards; risk management in banking; pillars Basel regulation; supervisory review process; capital requirements; market discipline; risk disclosure; capital buffer; financial instruments disclosure.
Int. J. of Financial Innovation in Banking, 2017 Vol.1, No.3/4, pp.192 - 208
Submission date: 01 Sep 2016
Date of acceptance: 12 Nov 2016
Available online: 21 Jul 2017