Financial companies could be undervalued by non-disclosure of economic capital, says PwC
LONDON -- Financial firms that don’t disclose their economic capital calculations to shareholders and other stakeholders risk undervaluing their companies, according to a study issued in March by professional services firm PricewaterhouseCoopers (PwC) and the Economist Intelligence Unit.
The measurement of economic capital, whereby a firm calculates the capital it needs to cover the risks it faces and the real returns being made, is at the heart of the proposed Basle II capital adequacy accord.
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