As to disclosures by firms themselves, the opaque nature of parts of a financial institution’s balance sheet makes special disclosure requirements especially important. There is, for example, a good case to be made for enhancing the Basel II requirements for disclosures relevant to a firm’s internal ratings system, consistent with the protection of genuinely proprietary information.
On the other hand, there is little point – and the potential for considerable unnecessary cost – in compelling disclosure of massive amounts of information that cannot be effectively assimilated by investors and counterparties. We invite suggestions from investors such as yourselves as to the kind and form of disclosures that will be most useful.