Moreover, with regard to securitizations, derivatives, and other innovative instruments that can transfer risk, it is not at all clear that accounting measures of a company’s balance sheet at a given point in time are sufficient to reflect the company’s financial risk profile. As bank regulators, we recognize the need to strike the right balance in deciding what disclosure standards to promote.
It is said that for every complex issue there is an answer that is simple, concise, and wrong. We would prefer to get it right. We need to identify the information that sufficiently informs investors of risk levels without being unduly burdensome and without revealing proprietary information.