- Limited or Non-Existent
- Irregularly Enforced
- Not Timely
- Not Granular
- DOSRI Loans and Insider Transactions are not adequately described or quantified.
For instance, in August 2006, Nasdaq OMX exchange threatened to delist Apple for failing to file its quarterly earnings statements or Form 10-Qs in a timely manner.5 At that time, Apple had some problems quantifying the financial impact of an options backdating scandal and was seeking an extension from the Nasdaq OMX exchange for the release of its financial statements. Apple, which has one of the largest market capitalizations in the world, was already a heavyweight (as much as 20% to 25%) of the Nasdaq 100 index back then. Its delisting would have sent shock waves throughout the global stock markets and drained market liquidity. This is like the PSE forcing a major component of the PSE Composite Index like PLDT or San Miguel Corporation to delist because it was late in its financial disclosures. Simply unthinkable in the Philippines.
- Names of DOSRI Borrowers
- Amount of Loan
- Date of Loan
- Loan Tenor and Maturity Date
- Price of Loan (Interest Rates)
- Purpose of Loan
- Nature of the Collateral provided
- Collateral Valuation and Appraisal
- Loan Status such as Current, Past Due, Restructured
Under its guidelines, even charitable contributions of Citigroup's directors are covered and disclosed.
The disclosures are very painstakingly detailed. Here's Citigroup's disclosure on the purchase of CEO Vikram Pandit's hedge fund, prior to his assumption of the CEO title.
It is highly unlikely that the BSP will severely limit DOSRI loans and transactions to a tiny sliver of bank capital. Large global banks such as Citigroup are not family owned. Instead, ownership is dispersed widely among various large financial institutions such as asset management firms and pension funds. But providing more detail as to the nature, status, and cost of these loans and transactions will go a long way in providing market discipline to the banking system. Shedding more light in the form of more regular, detailed, and timely public disclosures will certainly go a long way in purging the rot of the Philippine Banking System.