More Bank Data in XBRL?
The US SEC continues to move forward with a digital agenda that seems to have the dual aims of enhancing the regulator’s effectiveness, as well as improving the analytically useful information available to investors and markets. The Commission announced earlier this month a Request for Comment on a set of changes to the Statistical Disclosures by Bank Holding Companies.
Bank regulators in the United States release a very significant proportion of the data that they receive from regulated entities from a variety of data collections including the quarterly FFIEC Call Reports, which are distributed as Uniform Bank Performance Reports or UBPRs. Because that data is collected in XBRL format, it is also published in XBRL format. As the name might suggest, the UBPRs provide a consistent set of performance indicators about absolute and relative strength, risk appetite and solvency (or “capital adequacy”) measures. Instead of providing this information in aggregate form, which is the practice of the vast majority of financial regulators around the world, the US takes the view that one aspect of banks roles as fiduciaries is to be highly transparent, with the regulator releasing “unit record” (or individual bank) information that in many countries would be considered highly confidential. Of course, in the US there is both a highly developed bank deposit protection scheme and relatively high numbers of bank failures!
Banks have to publish financial statements all over the world, but because of the relative complexity of these financial intermediaries, the US is of the view that this is not sufficient. So in addition, as outlined above, the financial regulators disclosures about the relative performance of individual institutions has been a… healthy aspect… of US regulation since 1933. As you might expect, the release of Call Reports appears to have an impact on markets.
However, in addition, the SEC has obliged larger, publicly traded, bank holding companies to provide a range of additional information to the securities regulator, which it then passes on to the market. As these rules were last fully overhauled in the 1990s, and (ahem) the banking industry has moved on since then, the SEC is seeking feedback from interested parties on what they should be adding (and removing from) these forms.
The proposals specifically include a suggestion that all of the BHC data should be collected in XBRL format. We certainly approve. Interested in finding out more? You can find the consultation here. Readers might like to provide input on this issue to XBRL US, which plans to provide a comment letter.
