Thursday, September 27, 2012

Bank of England's Financial Policy Committee embraces transparency

As reported by the Telegraph, the Bank of England's Financial Policy Committee is recommending that
To give investors the confidence to put their money in the banks, lenders need to be more honest about the scale of bad debts they are carrying, the FPC said. 
“The task of attracting fresh external capital [could be] facilitated if steps were taken to reduce uncertainty about valuations of on-balance sheet assets,”
Please re-read the highlighted text as the FPC has effectively called for banks to provide ultra transparency as your humble blogger has been advocating and disclose on an ongoing basis their current global asset, liability and off-balance sheet exposure details.

It is only with this level of granular information that uncertainty about valuations is reduced and investor confidence is restored.

Uncertainty is reduced because market participants can independently confirm the valuations.

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