Operational Risk Disclosures in Hungarian Commercial Banks

This paper aims to assess the current operational risk disclosure in Hungarian banks. Therefore, we focus on the operational risk items that Hungarian banks disclose and if they comply with the requirements of the International Bank of Settlements. The survey methodology was adopted by testing the annual financial reports for Hungarian commercial banks. The analysis shows that Hungarian banks, primarily, do not meet the requirements of the International Bank of Settlement, relating to operational risk disclosure, and there are many discrepancies between Hungarian banks relating to the format of the financial report, which presents the operational risk disclosures. Commercial banks in Hungarya have different approaches of showing the disclosures of operational risk. Accordingly, they do not disclose the same types of information. Our study advice Hungarian commercial banks to enhance current operational risk disclosure practices. The contribution of this paper is to highlight the Hungarian commercial approaches of the operational risk disclosures.