HSBC 2012 Annual Report Download - page 14

HSBC HOLDINGS PLC
Report of the Directors: Overview (continued)
Disclosure philosophy // HSBC’s vision > Principal activities / HSBC Values
12
Our disclosure philosophy
HSBC strives to maintain the highest
standards of disclosure in our reporting
It has long been our policy to provide disclosures
that help investors and other stakeholders understand
the Group’s performance, financial position and
changes thereto. In accordance with this policy, the
information provided in the ‘Notes on the Financial
Statements’ and the ‘Report of the Directors’ goes
beyond the minimum levels required by accounting
standards, statutory and regulatory requirements and
listing rules. For this reason, we wholeheartedly
supported the work of the Enhanced Disclosure Task
Force (‘EDTF’) in 2012.
Enhanced Disclosure Task Force
Following increased demands for enhanced risk
disclosures, the Financial Stability Board established
the EDTF in May 2012 with the goal of developing
principles for enhancing risk disclosures by major
banks, recommending disclosure improvements and
identifying existing leading practice disclosures by
global financial institutions, starting with December
2012 risk disclosures and continuing into 2013 and
beyond.
The task force brought together senior officials
and experts from financial institutions, investors
and audit firms from around the world and, on
29 October 2012, the EDTF issued its report,
‘Enhancing the Risk Disclosures of Banks’.
Our approach
HSBC’s Annual Report and Accounts 2011
contained disclosures consistent with a majority of
the report’s recommendations, including some
disclosures referenced in the report as ‘leading
practice’. We have implemented the
recommendations of the report in 2012 and will
further enhance our risk disclosures in 2013.
Guide to the implementation of EDTF
recommendations in this Report
Our response to selected EDTF disclosure
recommendations of particular significance may be
found on the following pages, and in HSBC’s
Pillar 3 Disclosures 2012 report:
Type of risk Disclosure Page
General • Risks to which the business is exposed, risk appetite and stress testing. 124 to 128
• Top and emerging risks. 130 to 136
Risk Governance and risk
management strategies/
business models
• Group Risk Committee.
• Diagram of risk exposures by global business.
323 to 328
20
287• Reconciliation of the accounting balance sheet to the regulatory balance sheet.
• Regulatory capital flow statement. 285
• Analysis of credit risk by Basel asset class. Pillar 3
Disclosures 2012
23 to 28 and
32 to 38
Capital adequacy and risk-
weighted assets
• Risk-weighted assets flow statements for each risk-weighted asset type. 282 and 284
Liquidity • Liquid asset buffer. 206 to 207
Funding • Encumbrance. 211 to 214
• Maturity analysis by balance sheet line. 485 to 492
• Sources of funding and funding strategy. 209 to 211
Market risk • Relationship between the market risk measures for trading and non-trading portfolios
and balance sheet classification. 218 to 219
Credit risk • Policies for impaired loans and reconciliation of movement in impaired loans.
• Loan forbearance policies.
162 and
254 to 259
257
• Credit risk mitigation and collateral. 163 to 168
Other risks • Quantified measures on the management of operational risk. 227 to 230
For a detailed list of all disclosure enhancements prepared in response to the recommendations of the EDTF, along with their locations,
see page 119.