Bank's bail-outs may be kept under wraps
Bank of England's key exemption to accounting rules allows it to make less detailed disclosures
Though many will be keen to know the nature of the
Bank of England’s
support for troubled banks, the UK central bank has a key exemption to
accounting rules that allow it to make less detailed disclosures.
The Bank has said in its annual report, that in some cases, market confidence
is best sustained if support given by the Bank is disclosed only when the
conditions that gave rise to the ‘potentially systemic disturbance’ have
The Bank has the option to bypass key requirements of IFRS in keeping its
loans which could cause concern in the capital markets unannounced.
The financial statements of its banking department will show up the
‘financial effects’ of any such loan in the year in which they occur, but these
financial statements may ‘not explicitly identify the existence of such support’
and disclose less detail of key elements than is required under IFRS or the