EDTF Principles and Recommendations for Enhancing the Risk Disclosures of Banks
The EDTF was established at a critical time for the global financial system. Investors’ faith in banks and their business models has yet to be restored in the wake of the global financial crisis. Rebuilding investors’ confidence and trust in the banking industry is vital to the future health of the financial system – and responding to their demands for better risk disclosures is an important step in achieving that goal. High-quality risk disclosures should be viewed as a collective public good given the systemic importance of banks and the contingent liability they represent for taxpayers. Poor quality disclosures can result in higher uncertainty premiums, and this can undermine the extension of credit needed to support employment and productive investments in struggling economies, and affect its price.