Title: Market risk reporting in banking overcoming the limits of IAS/IFRS and Basel regulation

Authors: Salvatore Polizzi

Addresses: 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.

DOI: 10.1504/IJFIB.2017.085598

International Journal of Financial Innovation in Banking, 2017 Vol.1 No.3/4, pp.192 - 208

Received: 05 Sep 2016
Accepted: 12 Nov 2016
Published online: 01 Aug 2017 *

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