But we can expect oversight boards to enforce penalties appropriate to the situation that will discourage others from breaking the rules in the future. The complex nature of organizations--and constantly changing services, customers, and business conditions--suggests that market participants need additional types of information.
Leading firms have been developing comprehensive risk management processes for internal decisionmaking that can provide the framework for more meaningful disclosures. Regulators should encourage financial firms to develop these new approaches and, in these early stages, give them the flexibility to choose the most appropriate format for disclosure.