The Bank of New York
One Wall Street
New York, New York 10286
May 22, 2002
Mr. Jonathan G. Katz, Secretary
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549
Re: File No. S7-08-02
Dear Mr. Katz,
The Bank of New York Company, Inc. is pleased to have the opportunity to respond to the proposed rule change regarding the acceleration of periodic report filing dates and disclosure concerning website access to reports.
The Bank of New York Company, Inc. provides a complete range of banking and other financial services to corporations and individuals worldwide through its basic businesses, namely, Securities Servicing and Global Payment Services, Corporate Banking, BNY Asset Management and Private Client Services, Retail Banking, and Global Market Services. We had over $76 billion in total assets as of March 31, 2002.
We are supportive of the Commission's efforts to increase the timeliness and usefulness of reported financial information to users of that information, as well as other initiatives to enhance the quality of disclosure of information contained in financial statements.
Within the last decade, the financial markets in which we operate have become increasingly competitive, and the nature of transactions have become increasingly sophisticated. The accounting requirements have accordingly become equally complex in order to provide financial statement users with an understanding of the nature of these transactions. In the last few years financial reporting has been transformed by such initiatives as FAS 131 regarding segment reporting, FAS 133 regarding accounting for derivative transactions and subsequent amendments and DIG issues, FAS 140 regarding securitized transactions, and FAS 141/142 regarding purchase accounting and goodwill.
We currently provide income statement, period-end balance sheet, average balance sheet, and an analysis of the quarter's results to users in our press release usually within 14 business days of the period-end. There is obviously much analysis, review, discussion and oversight between the date of the earnings release and the date of our filings to the Commission that must be accomplished.
We are deeply concerned that efforts to accelerate the reporting process will only serve to reduce the time for the review and analysis and preparation of disclosures and supplementary information that is done subsequent to the earnings release. These tasks are done after the earnings release because they are time consuming and cannot be completed by the earnings release date. We foresee that any initiative to further compress these tasks will have the following outcome:
To meet the demands of accelerated reporting, we will have to increase staff to provide the equivalent man-hours needed in the shorter duration. An equivalent amount of man-hours from a larger staff working in a compressed time frame may not be as effective as a smaller staff working an equivalent amount of hours over a non-compressed time frame.
Accelerated reporting will result in higher costs. Accelerated reporting will increase staffing, external audit, internal audit, and printing costs.
We do not see the cost-benefit of moving to accelerated reporting. The increased cost of additional resources that will be required will not yield better financial reporting, and in fact, may only serve to diminish the quality of financial reporting. In conclusion, we respectfully request that the Commission not adopt release 33-8089.
John A. Park III
Senior Vice President
Tel: (212) 635-7085
Fax: (21) 635-7101