Caruana lambasts lack of credit risk disclosure at banks

Few banks disclose much about their credit risk models, the types of credit risk mitigation techniques they employ, or even the external or internal ratings assigned to their credit exposures, according to Jaime Caruana, chairman of the Basel Committee on Banking Supervision.

In his address to a Chicago conference, “Market Discipline: Evidence across countries and industries” in early November, Caruana said banks mostly disclosed accounting and presentation policies, capital structure and measures of capital adequacy, and, for those that had them, the kind of market risk models they used. His remarks were based on a study the Bank for International Settlements completed on disclosures earlier this year.

“The relative paucity of data available publicly on a typical