Effective Product Control

CHAPTER 21Financial Reporting and Note Disclosures

Earnings updates and financial statements are published periodically to provide the market with information on the bank's performance and statement of financial position. The frequency and depth of reporting differs by jurisdiction, with U.S. banks, such as Citigroup, having to publish financial statements each quarter, whilst U.K. banks, such as HSBC, publish earnings updates quarterly and financial statements semi-annually.

There is a dedicated team within a bank, financial control or financial reporting, who review and publish the financial reports. Their existence, however, does not absolve product control from understanding their business’ results from a financial reporting perspective. On the contrary, product control are required to provide their financial reporting colleagues with the business rationale for the results presented in the financial statements.

Context of Financial Reporting

It is important to consider the context of financial reporting and how it may differ to product control's context. We will look at some of the key items to consider within this subject.

Legal Entity View

Financial reporting present and analyse financial results from an alternate paradigm to that which product control are familiar with. Whereas product control will focus on a collection of trading books forming a trading desk and business, financial reporting's focus is on the legal entity view of that business. Figure 21.1 illustrates ...