OCC 2001-14
OCC Bulletin
Subject: Working Group on Public Disclosures
Description: Enhancements to Public Disclosure
Date: March 23, 2001

TO:	Chief Executive Officers of All National Banks,
Federal Branches and Agencies, Department and Division
Heads, and All Examining Personnel

The private sector Working Group on Public Disclosure
(In April 2000, the Federal Reserve Board established
the Working Group on Public Disclosure with the
participation of the OCC and the Securities and
Exchange Commission (collectively as "Agencies").The
Working Group's members were senior executives from
domestic and foreign banking organizations and
securities firms, and the group was chaired by Walter
Shipley, retired chairman of Chase Manhattan Bank.
Its objective was to recommend improvements in public
disclosures by large financial institutions.  This
objective was fulfilled by specifying various
recommendations in a letter to the federal agencies,
sent on January 11, 2001.  The report is available on
the OCC's Web site at
www.occ.treas.gov/ftp/release/2001-1b.pdf.) recently
issued a report recommending several enhancements to
public disclosure for large banking organizations and
securities firms in the areas of credit and market
risk.  The Office of the Comptroller of the Currency
(OCC) welcomes the efforts of the Working Group and
supports the use of such voluntary public disclosures
in furtherance of greater market transparency,
discipline, and stability.  Through this bulletin,
and similar concurrent issuances by the Federal
Reserve Board and the Securities and Exchange
Commission, the Agencies encourage banks, and other
financial institutions involved in lending and trading
activities, to consider the Working Group's
recommendations as they develop enhanced disclosures.

In addition to the broad principles contained in the
Working Group's January 2001 report, a number of 
specific recommendations were put forth.  These include
quarterly disclosure of some market risk information
now disclosed annually, and enhanced, quarterly
disclosures about credit concentrations and credit
quality of portfolios.  In particular, the Working
Group recommended that firms disclose:

1. Aggregate high-, average-, and low-trading value
at risk (VAR) over the quarter.

2. High-, average-, and low-trading VAR by major risk
category (e.g., fixed income, currency, commodity, and
equity) over the quarter, including diversification
effects.

3. Quantification of how well market risk models
performed (e.g., histograms of daily trading revenues
compared to average VAR over the quarter).

4. Current credit exposures by internal rating,
reflecting the effects of netting, collateral, and
other credit protection, including explanatory
information on their ratings, with comparisons, if
appropriate, to external ratings.  Recognizing that
it might be inappropriate or not feasible to include
certain credit products in this disclosure (e.g., debt
securities in trading inventory), firms should make it
clear which products are included.  Distinguishing
between loan and other credit exposures also would be
helpful.

5. Information about the maturity profile of
transactions giving rise to material credit exposures.

6. Insight into credit concentrations (e.g., industry
sector and country risk).

Some of the enhanced disclosures recommended by the
Working Group may be best incorporated in quarterly
and annual financial reports, which will generally be
issued by publicly held holding companies, while other
information may be more effectively communicated via
alternative media such as public Web sites.

The Agencies will continue to discuss the Working
Group's report within the regulatory community and
with financial institutions to explore additional ways
of enhancing disclosures.  In this regard, the Agencies
will consider the recommendations of the Working Group
in other efforts to improve public disclosures, such
as the ongoing project to revise the Basel Capital
Accord. 

If you have any questions or comments, please contact
Zane Blackburn, Chief Accountant, at (202) 874-5180.


______________________________ 
Emory W. Rushton
Senior Deputy Comptroller for Bank Supervision Policy