x Abu Dhabi, UAEMonday 24 July 2017

Global banks come under fire

Transparency International has criticised global banks as failing to shine more light on their inner workings and resisting calls for greater disclosure after the financial crisis.

Transparency International (TI) has criticised global banks as failing to shine more light on their inner workings and resisting calls for greater disclosure after the financial crisis.
The advocacy group, based in Berlin, laid out its criticisms as part of a study of the public disclosures of 105 of the biggest multinational corporations, which evaluated their efforts to root out corruption.
"The study found that reporting by banks and insurers on transparency measures underperformed across the board even though opaque company structures played a contributing role in the recent financial crises and in spite of a significant focus on fixing the lack of transparency in this sector," the group said.
Banks in particular were prone to company structures that obscured how revenue was being made. Lenders also were criticised as failing to disclose where they generated profits on a country-by-country basis.
"If country-level financial information is not adequately disclosed, it is difficult to know how operations in many developing countries contribute to local governments," said Jermyn Brooks, who chairs TI's business advisory board.
"Experience has shown that the requirement to report encourages companies to build strong management systems supporting disclosures, and in the process improving their anti-corruption systems," he said.
HSBC Holdings, Allianz and ANZ performed best in the study, while financial services companies including Citigroup, Visa, Goldman Sachs and Bank of America appeared in the bottom half of the ranking. China's banks fared worst overall.
Banks were criticised for failing to disclose more details of their anti-corruption efforts, which are often kept private because many lenders include them as part of their risk management functions. These functions are usually closely guarded for fear of a loss of competitive advantage.
But TI also laid into companies including Toyota, Russia's Gazprom and Amazon.com, which were among the 10 worst performers in the ranking.
Saudi Basic Industries Corporation, known as Sabic, was 78th out of the 105 companies studied. Sabic was the only Middle Eastern company assessed.
ghunter@thenational.ae
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