Bank results need to be spelt out

However, over recent years it has become difficult to represent accurately how banks have fared, as many seem to be increasingly reluctant to break out detailed figures representing forex department results. This made it impossible for us to list the top 30 banks in FX last year as we did in previous years.

Foreign exchange returns are now often a sub-sect of the fixed-income portion of a bank's results, and where this is the case they are not broken out. While banks are often happy to give an often rather vague comment about 'continuing growth' or 'tough markets', they will rarely give hard answers to questions about how the FX desk did compared with last year and why.

In an era where accounting standards are becoming more rigorous and transparency is seen as being of paramount importance when it comes to ensuring good corporate governance, this trend towards increased opacity is worrying. It is understandable that banks will be reluctant to explain why certain business lines did not perform. For those looking to accentuate the positive and gloss over the negative, rolling poor results into a bigger, more rosy picture makes sense on the face of it.

In the long term, however, hiding bad news will backfire. If results from a certain part of a business are lacklustre, there are usually good reasons to explain this. Where there are not, the media spotlight can do much to spur an organisation that may not have realised there was a problem to take what may be long-overdue action.

Either way, for those running businesses and for their teams, surely it is healthy to know how you are performing.

Those lobbying for the watering down of accounting standards such as FRS 17 are playing a dangerous game. The rules are being put in place to avoid scandals such as Enron reoccurring. It was Refco's dubious accounting practices that allowed a crooked chief executive to divert funds from one part of a sprawling business to another.

While I am in no way suggesting that banks becoming more vague in reporting FX results will lead to dishonesty, making things explicit will ensure everyone knows where they stand.