should be different, too. even in smaller organizations, disclosures should be tailored to reflect the activities of the organization. a summary of the information that executive management and the board of directors need to monitor the health of the enterprise is an excellent place to start when tailoring the information that would be useful to investors and customers. disclosure rules that are too rigid may become incompatible with risk management processes that continually evolve. disclosures should clearly identify all significant risk exposures - - whether on or off the balance sheet - and their impact on the firm's financial condition and performance, cash flow, and earnings potential. with regard to securitizations, derivatives, and other innovative risk - transfer instruments, traditional accounting disclosures of a company's balance sheet at a single point in time may not be sufficient to convey the full impact of a company's financial prospects. for example, if a firm securitizes receivables through commercial paper conduits, those receivables are no longer on the company's books under current accounting standards. yet the aging of receivables is a key indicator that investors and lenders use to assess the quality of sales and operations. if the receivables move off the balance sheet, information about the aging of the receivables should continue to be part of the firm's disclosures. equally important are disclosures about how risks are being managed and the underlying basis for values and other estimates that are included in financial reports. these disclosures should identify key risk drivers and describe the range of possible outcomes. unlike typical accounting reports, information generated by risk management tends to be oriented less to a point in time and more to a description of the risks and the variability of results. to take an example from the world of banking where the discipline of risk management is relatively well developed, an accounting report might say that the fair value of an investment portfolio is $ 300 million and has dropped $ 10 million from the last report. however, the bank's internal risk report would show much more extensive information, such as the interest rate, maturity, and credit quality of the assets and the range of values the portfolio would take under alternative future scenarios. the user of a risk - management report could determine whether changes in value were due to declining credit quality, rising interest rates, portfolio sales, or payoffs of underlying loans. corporate risk officers have developed other types of reports that provide information on the extent to which the total

randal k quarles : progress on the transition to risk - free rates speech by mr randal k quarles, vice chairman for supervision of the board of governors of the federal reserve system, at the financial stability board roundtable on reforming major interest rate benchmarks, washington dc, 10 april 2019. * * * i am pleased that we have this opportunity to meet with many of the institutions active in helping to achieve a transition from libor to the risk - free rates identified by working groups in each of our jurisdictions. the financial stability board ( fsb ) has coordinated the international effort to reform interest rate benchmarks at the direction of the g - 20. this is an important effort across the globe, but nowhere is it of more importance than in the jurisdictions relying on libor. let ’ s review the reasons that we are here. by the time of the financial crisis, much of the global financial system had come to rely on libor. and yet libor was a very poorly structured rate ; contributing banks were asked to submit quotes without any requirement of evidence of transactions or other facts to back them up, which made them susceptible to manipulation. thanks to subsequent reforms, contributors now provide this type of evidence where possible, but libor is based on an underlying market with so few transactions that there is relatively little direct evidence they can provide. many submitting banks are uncomfortable with this situation, and some sought to stop their participation. as a result, the official sector has had to step in to support libor by securing a voluntary agreement with the remaining banks to continue submitting through 2021. at the same time, the official sector has convened national working groups to help develop alternative risk - free rates and navigate a very complicated transition. many people have used reference rates with little thought. the experience with libor should teach us that this has to change and that we cannot risk making this kind of mistake again. banks should conduct at least as much due diligence on the reference rates that they use as they conduct on the creditworthiness of their borrowers. the national working groups convened by many of the fsb member authorities have performed that type of diligence with the secured overnight funding rate, or sofr, and the risk - free rates identified in other jurisdictions. that effort has been a clear and positive example of public - private sector cooperation. these alternative risk - free rates have been created or substantially reformed to ensure that robust, transaction - based rates that accurately represent well