European Securities and Markets Authority (ESMA) wants all banks in the region to clearly mention their exposures to sovereign debt in their upcoming International Financial Reporting Standards (IFRS) financial statements for enhanced transparency.
European Union watchdog, ESMA, said it has increased its coordination of monitoring activities of competent authorities in response to the increased market interest in sovereign debt and related instruments.
The participation of ESMA in financial reporting is to assist issuers in preparing disclosures on sovereign debt and to ensure effective and consistent application of European Securities and Markets legislation.
The watchdog also further said that an appropriate application of relevant IFRS is essential in order to ensure adequate disclosures by listed companies’ exposures to sovereign debt.
ESMA anticipates disclosures should be provided country by country.
The inclusion of any additional relevant information will help the investor in better understanding the financial information, according to ESMA.