The global financial crisis heightened the desirability for banks to publicly disclose their exposures to certain instruments that the marketplace now considers to be high risk or to involve more risk than previously thought, including collateralised debt obligations (CDOs), residential mortgage-backed securities (RMBS), commercial mortgage-backed securities (CMBS), other special purpose entities (SPEs), and leveraged finance. In response, many financial firms have enhanced their disclosures of these exposures. High quality risk disclosures contribute to financial stability by providing investors and other market participants with a better understanding of firms’ risk exposures and risk management practices.

The FSB published in March 2011 the results of a Thematic Review on Risk Disclosure Practices that highlighted the continuing importance of high quality risk disclosures that contribute to financial stability by providing investors and other market participants with a better understanding of firms’ risk exposures and risk management practices. Following that report, the FSB facilitated the establishment of the Enhanced Disclosure Task Force (EDTF), a private sector group of preparers, auditors and users of banks’ financial statements. In October 2012, the FSB published the EDTF’s report Enhancing the Risk Disclosures of Banks which included a series of Principles and Recommendations for banks’ risk disclosures. At the FSB’s request, the EDTF in 2013 undertook a survey of the extent of implementation in banks’ 2012 financial statements, and further surveys were conducted in 2014 and 2015. The three surveys showed an increase in the number of banks that implemented the recommendations plus the extent and quality of implementation, as a result the EDTF was disbanded.

The FSB encourages banks to continue to strive to improve risk disclosures, and calls on supervisory authorities to take steps to foster awareness of the EDTF Principles and Recommendations by banks and markets in their national jurisdictions.