A Case Study of Derivative Disclosures During
Municipal Bond Insurance Association were affected when the Supreme mortgage financial crisis took place in 007. He issue of disclosures of derivative or the transparency of information for the parties involved in the derivative transaction still exists. The proposal in US legislator Ninth regards to the financial reform with regards to derivatives can be a great help in providing a solution of transparency of information.
However, some opposed to the proposal reform for the fact that it can be an obstacle when doing the derivative transactions. Fortunately, improvement/amendment in the derivative accounting is being done
Ninth respect to disclosures of derivative. It can be seen from the International Accounting Standards used globally. However, it is noted that some of its provision are not applicable to other countries. It is advisable that the government must consider implementing additional framework or regulation especially those unregulated derivatives market. This might help minimize the risk of incurring more loss and the issue of transparency/ disclosure of information.
It will be fair to everyone to have standard contracts in dealing derivatives. E controversy with regards to the failure of Banker’s Trust rooted from not disclosing the right information to their clients. Hence, proper disclosure of Information is very important especially in doing decision making. Rhea issue of transparency/disclosure is one of the issues that need to be resolved and proper action must be taken immediately. Although there were action taken by the government, but still, there’s need to be improved considering more companies suffered loss and some derivative transactions are not regulated.