Eloy Lindeijer, Chief Investment Management at PGGM: ‘Having a responsible investment policy is extremely important to our customers. So it follows that better risk disclosure by banks is also important to PGGM and its customers. It enables us to make a better assessment of our interests in banks and make more responsible investment decisions. Moreover, in our opinion greater transparency will help strengthen risk management and the risk culture of banks as well as restore confidence in the financial sector. Restoring confidence is essential and will have a positive effect on financial stability in the broader sense.’ Lindeijer was involved in this initiative on PGGM's behalf as a representative of investors in banks.
The report includes seven fundamental principles for better disclosures by banks:
- 1) clarity;
- 2) inclusion of key activities and risks;
- 3) presenting relevant information;
- 4) a reflection of how risks are managed;
- 5) consistency;
- 6) comparability;
- 7) timeliness.
It also includes ambitious and specific recommendations, ranging from solvency disclosure to descriptions of the risk profile and risk culture of banks. They are the result of close cooperation between authors and users of financial reports. The recommendations are an enhancement of existing reporting requirements and are expected to be largely adopted in reports on 2012 and 2013.
The principles and recommendations are a voluntary standard which can very well be used by investors for engagement on transparency and governance of banks.
The Financial Stability Board's press release is available at:
The report Enhancing the Risk Disclosures of Banks is available at:
PGGM is a pension fund service provider offering pension management, integrated asset management, management support and policy advice to its institutional customers. PGGM currently works on behalf of six pension funds, managing more than EUR 128 billion in pension assets of 2.5 million people. As a cooperative organisation, PGGM helps its more than 570,000 members secure a valuable future. PGGM works independently or with strategic partners to develop innovative future benefit solutions combining pensions, care, accommodation and employment.