The Hong Kong Monetary Authority has asked all SAR banks to increase disclosure in interim reports in a bid to enhance transparency. The new disclosure requirement was issued by the HKMA yesterday in a circular to all locally incorporated banks. The measure aims to bring local banks' disclosure standards in line with those of their overseas counterparts. The authority yesterday also issued a circular to overseas-incorporated banks aimed at eliminating disclosure inconsistencies between local and overseas lenders. All banks must observe the new disclosure requirement in their statements for the financial period to June 30 and beyond. Local banks must disclose some balance sheet information in their interim reports. The new rules also require local banks to disclose credit risk weighted amounts, replacement costs of contingent liabilities and commitments, exchange rate contracts, interest rate contracts and derivatives products in their interim reports. They must also disclose the average liquidity ratio for the financial period. The authority dropped a proposal for banks to disclose interim results within two months after the year ends, instead of three. The banks complained that the proposal would be too difficult to put into practice. For overseas-incorporated banks, the main changes introduced by the HKMA include disclosure of replacement costs of exchange-rate contracts, interest-rate contracts and other derivatives.