RISK MANAGEMENT DISCLOSURES AMONG THE FINANCIAL INSTITUTIONS: AN OVERVIEW 0 0

Abstract

The global financial crisis has raised questions on the risk management disclosures of the financial institutions. As a result, the importance of adequate and transparent risk disclosures among the financial institutions has been exclusively highlighted. The paper discusses about the concept, need, benefits and the existing literature on Risk Management Disclosures. An adequate and timely risk disclosure help the stakeholders to make informed decisions and benefits the institution through improved reputation, enhanced confidence and improved communication to the stakeholders and lower financing cost. However, the existing literature provides evidence for inadequate risk disclosures being qualitative in nature. Hence, it is suggested that the qualitative risk disclosures should be supplemented by quantitative risk disclosures to be of relevance to the stakeholders in decision making. Moreover, regulatory bodies should enhance the risk disclosure requirements for the financial institutions by making it mandatory in nature.