Abstract
Risk disclosure in banking is particularly important for the efficacy of market discipline, the assessment of bank performance, the efficiency of the financial market, and the overall stability of the financial system. The European banking union and the financial crisis have enhanced the strategic role of credit risk disclosure in banking. The topic of this chapter is the evaluation of credit risk disclosure practices in banks’ annual financial reporting. The empirical research is conducted on a sample of ten large Italian banks. The authors employ content analysis and provide a hybrid scoring model for the assessment of credit risk disclosure. The chapter provides empirical findings which reveal significant differences between banks’ credit risk reporting practices, even though they are subject to similar regulatory and accounting frameworks.
Although this chapter has been written jointly by the two authors, it is possible to identify the contribution of each one as follows. Abstract and Sects. 1, 2, 5, and 6 have been written by Enzo Scannella. Sections 3 and 4 have been written jointly by Enzo Scannella and Salvatore Polizzi. The data were analyzed jointly by the two authors. All the figures and tables were prepared jointly by the two authors.
This is a preview of subscription content, log in via an institution.
Buying options
Tax calculation will be finalised at checkout
Purchases are for personal use only
Learn about institutional subscriptionsNotes
- 1.
- 2.
A brief overview of the recent history of the bank capital requirements regulation, that has an impact on risk disclosure, follows: Basel Committee on Banking Supervision (2006, 2011, 2015, 2017); Capital Requirements Directives (Directive 2006/48/EC relating to the taking up and pursuit of the business of credit institution; Directive 2006/49/EC on the capital adequacy of investment firms and credit institutions); Regulation n. 575/2013 of the European Parliament and of the Council on prudential requirements for credit institutions and investment firms; Directive 2013/36 of the European Parliament and of the Council on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms. For more detailed information at the national level, see: Bank of Italy (2006, 2013).
- 3.
- 4.
The same sample has been used by Scannella (2018) with reference to market risk reporting.
- 5.
- 6.
- 7.
- 8.
- 9.
- 10.
- 11.
- 12.
- 13.
Sources: BPER Banca (2012–2017) Bilancio dell’esercizio. BPER Banca, Informativa al pubblico. Basilea 2 Pillar 3.
- 14.
- 15.
- 16.
Bank of Italy appointed the liquidators who sold a part of Banca Popolare di Vicenza to Banca Intesa Sanpaolo.
References
Acharya, V., & Richardson, M. (2009). Restoring Financial Stability. New York: Wiley.
Acharya, V., & Ryan, S. G. (2016). Banks’ Financial Reporting and Financial System Stability. Journal of Accounting Research, 54(2), 277–340.
Banca Nazionale del Lavoro. (2012–2013). Bilancio d’esercizio. Retrieved December 10, 2017, from https://bnl.it/it/Scopri-BNL/Chi-Siamo/BNL-Oggi/Informazioni-Finanziarie/Relazioni-Bilanci-e-Pillar-3.
Banca Nazionale del Lavoro. (2012–2017). Pillar 3 Report. Retrieved April 20, 2018, from https://bnl.it/it/Scopri-BNL/Chi-Siamo/BNL-Oggi/Informazioni-Finanziarie/Relazioni-Bilanci-e-Pillar-3.
Banca Nazionale del Lavoro. (2014–2017). Relazione finanziaria. Retrieved April 20, 2018, from https://bnl.it/it/Scopri-BNL/Chi-Siamo/BNL-Oggi/Informazioni-Finanziarie/Relazioni-Bilanci-e-Pillar-3.
Banca Popolare di Milano. (2012–2016). Relazione e Bilancio. Retrieved January 10, 2018, from http://www.gruppobpm.it/it-ist/investor-relations/bilanci.html.
Banca Popolare di Milano. (2012–2016). Informativa al pubblico. Pillar 3. Retrieved January 10, 2018, from http://www.gruppobpm.it/it-ist/investor-relations/pillar3.html.
Banca Popolare di Vicenza. (2012–2016). Relazioni e Bilancio. Retrieved January 15, 2018, from https://www.popolarevicenza.it/bpvi-web/home/Investor-Relations/bilanci.html.
Banca Popolare di Vicenza. (2012–2016). Terzo Pilastro di Basilea 2. Informativa al pubblico. Retrieved January 15, 2018, from https://www.popolarevicenza.it/bpvi-web/home/Investor-Relations/informativaAlPubblico.html.
Banco Popolare. (2012–2017). Relazione finanziaria annuale. Retrieved April 20, 2018, from https://www.bancobpm.it/investor-relations/bilanci-e-relazioni/.
Banco Popolare. (2012–2017). Informativa al pubblico. Retrieved April 20, 2018, from https://www.bancobpm.it/investor-relations/terzo-pilastro-pillar-3/.
Bank of Italy. (2005). Il bilancio bancario: schemi e regole di compilazione. Circular n. 262. Retrieved January 10, 2018, from https://www.bancaditalia.it/compiti/vigilanza/normativa/archivio-norme/circolari/c262/index.html?com.dotmarketing.htmlpage.language=102.
Bank of Italy. (2006). Nuove disposizioni di vigilanza prudenziale per le banche. Circular n. 263. Retrieved January 10, 2018, from http://www.bancaditalia.it/compiti/vigilanza/normativa/archivio-norme/circolari/c263/index.html.
Bank of Italy. (2013). Disposizioni di vigilanza per le banche. Circular n. 285. Retrieved January 10, 2018, from https://www.bancaditalia.it/compiti/vigilanza/normativa/archivio-norme/circolari/c285/index.html.
Basel Committee on Banking Supervision. (1988). International Convergence of Capital Measurement and Capital Standards. Retrieved December 10, 2017, from https://www.bis.org/publ/bcbs107.htm.
Basel Committee on Banking Supervision. (2000). Best Practices for Credit Risk Disclosure. Retrieved December 10, 2017, from https://www.bis.org/publ/bcbs74.htm.
Basel Committee on Banking Supervision. (2006). International Convergence of Capital Measurement and Capital Standards. A Revised Framework. Comprehensive Version. Retrieved December 10, 2017, from https://www.bis.org/publ/bcbs128.htm.
Basel Committee on Banking Supervision. (2011). Basel 3: A Global Regulatory Framework for More Resilient Banks and Banking Systems. Revised Version. Retrieved November 20, 2017, from https://www.bis.org/publ/bcbs189.htm.
Basel Committee on Banking Supervision. (2015). Revised Pillar 3 Disclosure Requirements. Retrieved November 20, 2017, from https://www.bis.org/bcbs/publ/d309.htm.
Basel Committee on Banking Supervision. (2017). Pillar 3 Disclosure Requirements. Consolidated and Enhanced Framework. Retrieved January 10, 2018, from https://www.bis.org/bcbs/publ/d400.htm.
Bastianini, G., Parascandolo, M., & Tutino, F. (2005). La performance delle banche. Rome: Bancaria Editrice.
Beattie, V. A., & Liao, S. (2014). Financial Accounting in the Banking Industry: A Review of the Empirical Literature. Journal of Accounting & Economics, 58(2), 339–383.
Begley, T. A., Purnanandam, A., & Zheng, K. (2017). The Strategic Underreporting of Bank Risk. Review of Financial Studies, 30(10), 3376–3415.
Berelson, B. (1952). Content Analysis in Communication Research. Glencoe, IL: Free Press.
Bessis, J. (2015). Risk Management in Banking. New York: Wiley.
Bisoni, C. (1988). Il bilancio delle banche. Bologna: Il Mulino.
Bisoni, C., Olivetti, S., Rossignoli, B., & Vezzani, P. (2012). Il bilancio della banca e l’analisi della performance. Rome: Bancaria Editrice.
BPER Banca. (2012–2017). Bilancio dell’esercizio. Retrieved April 20, 2018, from https://istituzionale.bper.it/investor-relations/bilanci-e-relazioni.
BPER Banca. Informativa al pubblico. Basilea 2 Pillar 3. Retrieved April 20, 2018, from https://istituzionale.bper.it/investor-relations/pillar-3-informativa-al-pubblico.
Bryan, S. H. (1997). Incremental Information Content of Required Disclosures Contained in Management Discussion and Analysis. The Accounting Review, 72(2), 285–301.
Calandrini, C., Cavalieri, E., Giordano, G., & Vacca, C. (1993). Il bilancio di esercizio degli enti creditizi. Turin: Utet.
Core, J. (2001). A Review of the Empirical Disclosure Literature: Discussion. Journal of Accounting and Economics, 31(1–3), 441–456.
Crockett, A. (2002). Market Discipline and Financial Stability. Journal of Banking & Finance, 26(5), 977–987.
De Laurentis. (2004). Performance Measurements Frontiers in Banking and Finance. Milan: Egea.
Dell’Atti, A. (2009). I principi contabili internazionali nell’economia e nei bilanci delle banche. Bari: Cacucci Editore.
Financial Stability Board. (2012). Enhancing the Risk Disclosures of Banks. Bank for International Settlements. Retrieved December 10, 2017, from http://www.fsb.org/wp-content/uploads/r_121029a.pdf.
Freixas, X., & Laux, C. (2012). Disclosure, Transparency, and Market Discipline. In M. Dewatripont & X. Freixas (Eds.), The Crisis Aftermath: New Regulatory Paradigms (pp. 69–104). London: Centre for Economic Policy Research.
Gaetano, A. (1996). Il sistema dei rischi nel bilancio di esercizio degli enti creditizi. Padova: Cedam.
Holsti, O. R. (1969). Content Analysis for the Social Sciences and Humanities. Reading: Addison-Wesley Publishing Company.
Hull, J. (2018). Risk Management and Financial Institutions. New York: Wiley.
International Accounting Standard Boards. (2010). The Conceptual Framework for Financial Reporting. Retrieved December 5, 2017, from https://www.ifrs.org/issued-standards/list-of-standards/conceptual-framework/.
Intesa Sanpaolo. (2012–2017). Relazione e bilancio. Retrieved April 20, 2018, from https://www.group.intesasanpaolo.com/scriptIsir0/si09/investor_relations/ita_bilanci_relazioni.jsp#/investor_relations/ita_bilanci_relazioni.jsp.
Intesa Sanpaolo. (2012–2017). Terzo pilastro di Basilea 2. Informativa al pubblico. Retrieved April 20, 2018, from https://www.group.intesasanpaolo.com/scriptIsir0/si09/governance/ita_terzo_pilastro_basilea.jsp#/governance/ita_terzo_pilastro_basilea.jsp.
Kissing, P. (2016). Corporate Disclosures and Financial Risk Assessment. Wien: Springer.
Krippendorff, K. (2004). Content Analysis: An Introduction to Its Methodology. Thousand Oaks: Sage.
Lev, B. (1992). Information Disclosure Strategy. California Management Review, 34(4), 9–32.
Maffei, M. (2017). La disclosure sui rischi con particolare riferimento alle banche. Turin: Giappichelli.
Malinconico, A. (2007). La disclosure dei rischi nelle banche: possibili effetti sulla disciplina di mercato. Banche e Banchieri, 5, 369–383.
Masera, R. (2005). Rischio, banche, imprese. Milano: Il Sole 24 Ore.
Masera, R. (2009). The Great Financial Crisis. Rome: Bancaria Editrice.
Masera, R. (2016). Sfide e opportunità della regolamentazione bancaria: diversità, proporzionalità e stabilità. Rome: Ecra.
Mazzeo, R., Palombini, E., & Zorzoli, S. (2005). IAS-IFRS e imprese bancarie. Rome: Bancaria Editrice.
Mediobanca. (2012–2017). Bilanci. Retrieved April 20, 2018, from https://www.mediobanca.com/it/investor-relations/risultati-presentazioni/presentazioni.html.
Mediobanca. (2012–2017). Terzo pilastro di Basilea 2. Informativa al pubblico. Retrieved July 20, 2018, from https://www.mediobanca.com/it/investor-relations/adeguatezza-patrimoniale/terzo-pilastro-pillar-iii.html.
Monte dei Paschi di Siena. (2012–2017). Relazione e bilancio. Retrieved April 20, 2018, from https://www.gruppomps.it/investor-relations/risultati-finanziari/risultati-finanziari.html.
Monte dei Paschi di Siena. (2012–2017). Informativa al pubblico. Pillar 3. Retrieved April 20, 2018, from https://www.gruppomps.it/investor-relations/report-pillar-iii.html.
Morgan, D. (2002). Rating Banks: Risk and Uncertainty in an Opaque Industry. American Economic Review, 92(4), 874–888.
Mottura, P. (2011). Banche. Strategie, organizzazione e concentrazioni. Milan: Egea.
Mottura, P. (2014a). La banca commerciale: sostenibilità del modello di intermediazione. Bancaria, 70(2), 2–20.
Mottura, P. (2014b). Banca e regolamentazione: come ripensare una relazione complessa e instabile. Bancaria, 70(4), 2–25.
Mottura, P. (2016). Banca. economia e gestione. Milan: Egea.
Nadotti, L. (1995). Il bilancio delle banche. Bologna: Il Mulino.
Nadotti, L. (2004). Bilancio, interpretazione e analisi della gestione bancaria. Turin: Giappichelli.
Nier, E., & Baumann, U. (2006). Market Discipline, Disclosure and Moral Hazard in Banking. Journal of Financial Intermediation, 15(3), 332–361.
Onado, M. (2000). Mercati e intermediari finanziari. Bologna: Il Mulino.
Onado, M. (2004). La Banca come impresa. Bologna: Il Mulino.
Onado, M. (2016). Economia e regolamentazione del Sistema Finanziario. Bologna: Il Mulino.
Onado, M. (2017). Alla ricerca della banca perduta. Bologna: Il Mulino.
Ossola, G. (2005). Gli schemi del bilancio di esercizio degli enti creditizi. Milan: Giuffrè.
Paolucci, G., & Menicucci, E. (2008). Bilancio delle banche e principi IAS/IFRS. Turin: Giappichelli.
Polizzi, S. (2017). Market Risk Reporting in Banking: Overcoming the Limits of IAS/IFRS and Basel Regulation. International Journal of Financial Innovation in Banking, 1(3–4), 192–208.
Rutigliano, M. (2011). Il bilancio della Banca. Milan: Egea.
Rutigliano, M. (2012). L’analisi del bilancio delle banche. Milan: Egea.
Rutigliano, M. (2016). Il bilancio delle banche e degli altri intermediari finanziari. Milan: Egea.
Ryan, S. (2012). Risk Reporting Quality: Implications of Academic Research for Financial Reporting Policy. Accounting and Business Research, 42(3), 295–324.
Scannella, E. (2018). Market Risk Disclosure in Banks’ Balance Sheet and Pillar 3 Report: The Case of Italian Banks. In M. García-Olalla & J. Clifton (Eds.), Contemporary Issues in Banking. Regulation, Governance and Performance (pp. 53–90). London: Palgrave Macmillan.
Scannella, E., & Polizzi, S. (2018). Market Risk Disclosure in Banking: An Empirical Analysis on Four Global Systemically Important European Banks. Journal of Banking Regulation, 198(2), 87–100.
Sironi, A., & Resti, A. (2008). Rischio e valore nelle banche. Milan: Egea.
Tutino, F. (2009). Il bilancio delle banche. Rome: Bancaria Editrice.
Tutino, F. (2013). Analisi dei rischi finanziari delle banche: è necessario utilizzare gli strumenti dell’Economia Aziendale? Bancaria, 69(10), 28–42.
Tutino, F. (2014). Vigilanza Unica Europea e squilibrio di rischiosità delle banche: verso nuove regole di limitazione dei rischi? Bancaria, 70(3), 15–24.
Tutino, F. (2015). La Banca. Economia, finanza, gestione. Bologna: Il Mulino.
Tutino, F., Birindelli, G., & Ferretti, P. (2011). Basilea 3. Gli Impatti sulle banche. Milan: Egea.
UBI Banca. (2012–2017). Relazioni e bilanci. Retrieved April 20, 2018, from https://www.ubibanca.it/pagine/Bilanci_e_Relazioni_2018.aspx.
UBI Banca. (2012–2017). Informativa al pubblico. Pillar 3. Retrieved April 20, 2018, from https://www.ubibanca.it/pagine/Pillar-3-IT.aspx.
Unicredit. (2012–2017). Relazioni e bilancio. Retrieved April 20, 2018, from https://www.unicreditgroup.eu/it/investors/financial-reports.html.
Unicredit. (2012–2017). Terzo pilastro di Basilea 2. Informativa al Pubblico. Retrieved April 20, 2018, from https://www.unicreditgroup.eu/it/investors/third-pillar-basel-two-and-three.html.
Weber, R. P. (1990). Basic Content Analysis. Beverly Hills: Sage.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2019 The Author(s)
About this chapter
Cite this chapter
Scannella, E., Polizzi, S. (2019). Credit Risk Disclosure Practices in the Annual Financial Reporting of Large Italian Banks. In: Gualandri, E., Venturelli, V., Sclip, A. (eds) Frontier Topics in Banking. Palgrave Macmillan Studies in Banking and Financial Institutions. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-16295-5_10
Download citation
DOI: https://doi.org/10.1007/978-3-030-16295-5_10
Published:
Publisher Name: Palgrave Macmillan, Cham
Print ISBN: 978-3-030-16294-8
Online ISBN: 978-3-030-16295-5
eBook Packages: Economics and FinanceEconomics and Finance (R0)