One measure of the FSA’s lack of confidence in its own future is the language now being employed in its press releases.
Monday’s missive — FSA announces tough new code for financial reporting disclosure — was full of fury and threats and calls to action. Banks, the FSA warned, had better implement this really tough new code, otherwise the regulator would be looking at imposing disclosure templates and maybe even forcing the banks into full-blown quarterly reporting.
The message was clear: the regulator, like the public, has had enough. Banks will now be made to behave — or else.
So we’ve had a look at this “tough new code”, and as it turns out, the thing was actually produced by the British Bankers’ Association.
That’s the bba, as in the cuddly, lower-case, informative “voice of banking & financial services.” Here are the bullet points:
Overarching principle
1. UK banks are committed to providing high quality, meaningful and decision-useful disclosures to users to help them understand the financial position, performance and changes in the financial position of their businesses.
Compliance with IFRS
2. UK banks will continue to keep under review and are committed to ongoing re-evaluation and enhancement of their financial instrument disclosures for key areas of interest.
IASB Expert Advisory Panel, Senior Supervisors Group and other good practice guidance
3. UK banks acknowledge the importance of good practice recommendations and similar guidance issued from time to time by relevant regulators and standards setters and will assess the applicability and relevance of such guidance to their disclosures.
4. UK banks will seek to enhance the ability to compare financial statement disclosures across the UK banking sector.
5. UK banks should clearly differentiate in their annual reports between information that is audited and information that is unaudited.
And, er… that’s it. You can find some explanatory paragraphs to this five-rule code on page 50 of this pdf, but the so-called tough code is essentially a pledge by the banks to act professionally.
Now, we know why the FSA feels the need to sound puffed-up and angry: people like UK shadow chancellor George Osborne want to close the regulator down.
But editorialising is a dangerous habit — especially when the underlying story is slightly pathetic.
Related links:
FSA finalises liquidity bondage – FT Alphaville
From light touch to ham fist: the FSA’s new short regime – FT Alphaville
FSA releases ‘not-so-stressy’-test methodology – FT Alphaville