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Pillar 3 disclosure requirements – updated framework (consultative document)

Summary:
The Basel Committee on Banking Supervision has today issued for consultation Pillar 3 disclosure requirements - updated framework. Pillar 3 of the Basel framework seeks to promote market discipline through regulatory disclosure requirements. Many of the proposed disclosure requirements published today are related to the finalisation of the Basel III post-crisis regulatory reforms in December 2017 and include new or revised requirements: for credit risk (including provisions for prudential treatment of assets), operational risk, the leverage ratio and credit valuation adjustment (CVA); that would benchmark a bank's risk-weighted assets (RWA) as calculated by its internal models with RWA calculated according to the standardised approaches; and that

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The Basel Committee on Banking Supervision has today issued for consultation Pillar 3 disclosure requirements - updated framework. Pillar 3 of the Basel framework seeks to promote market discipline through regulatory disclosure requirements. Many of the proposed disclosure requirements published today are related to the finalisation of the Basel III post-crisis regulatory reforms in December 2017 and include new or revised requirements:

  • for credit risk (including provisions for prudential treatment of assets), operational risk, the leverage ratio and credit valuation adjustment (CVA);
  • that would benchmark a bank's risk-weighted assets (RWA) as calculated by its internal models with RWA calculated according to the standardised approaches; and
  • that provide an overview of risk management, key prudential metrics and RWA.

In addition, today's publication proposes new disclosure requirements on asset encumbrance and capital distribution constraints.

Separately, the Committee is seeking feedback on the scope of application of the disclosure requirement on the composition of regulatory capital that was introduced in March 2017.

Together with the first phase and second phase of the revised Pillar 3 disclosure requirements issued in January 2015 and March 2017 respectively, the proposed disclosure requirements would comprise the single Pillar 3 framework.

The Committee welcomes comments which should be uploaded here by Friday 25 May 2018. All comments will be published on the website of the Bank for International Settlements unless a respondent specifically requests confidential treatment.

International Settlement
The Bank for International Settlements (BIS) is an international company limited by shares owned by central banks which "fosters international monetary and financial cooperation and serves as a bank for central banks". The BIS carries out its work through subcommittees, the secretariats it hosts and through an annual general meeting of all member banks. It also provides banking services, but only to central banks and other international organizations. It is based in Basel, Switzerland, with representative offices in Hong Kong and Mexico City.

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