The Basel Committee on Banking Supervision has issued for consultation Pillar 3 disclosure requirements – consolidated and enhanced framework. Pillar 3 of the Basel framework seeks to promote market discipline through regulatory disclosure requirements. The proposed enhancements include:
- the addition of a “dashboard” of key metrics,
- a draft disclosure requirement of hypothetical risk-weighted assets calculated based on the Basel framework’s standardised approaches, and
- enhanced granularity for disclosure of prudent valuation adjustments.
The proposal also incorporate additions to the Pillar 3 framework to reflect ongoing reforms to the regulatory framework. These include, for example, disclosure requirements for:
- the total loss-absorbing capacity (TLAC) regime for global systemically important banks,
- the proposed operational risk framework, and
- the final standard for market risk.
The Committee’s proposal would also consolidate all existing Pillar 3 disclosure requirements of the Basel framework, including the leverage ratio and liquidity ratios disclosure templates. Together with the Revised Pillar 3 disclosure requirements issued in January 2015, the proposed disclosure requirements included in this consultation would comprise the single Pillar 3 framework.
The Committee welcomes comments from both Pillar 3 users and preparers on the proposals described in this consultative document here by Friday 10 June 2016.
