Proposed revisions to Pillar 3 disclosure requirements published by the Basel Committee
24 June 2014
|As an accommodation to interested parties that have requested additional time to comment on the package of proposed revisions to the Pillar 3 disclosure framework, the Committee has agreed to extend the comment period by two weeks until Friday 10 October 2014.|
The Basel Committee on Banking Supervision has today published for consultation its Review of the Pillar 3 disclosure requirements.
The proposed revisions aim to enhance comparability across banks by ensuring greater consistency in the way they disclose information about risk exposures. The review was prompted by concerns that the Basel framework's existing Pillar 3 disclosure regime failed to promote the early identification of a bank's material risks and did not provide sufficient information to enable market participants to assess a bank's overall capital adequacy. A particular goal of the proposed revisions is to improve the transparency of the internal model-based approaches that banks use to calculate minimum regulatory capital requirements. Under the revised regime, for example, banks would be required to disclose the drivers of changes in risk-weighted assets and the actual versus forecast performance of certain modelling parameters.
The Basel Committee is reviewing its disclosure requirements in two phases. The present consultative document covers the first phase and focuses on overhauling the existing disclosure requirements related to risk-weighted assets. Once finalised, the proposals published today will replace the existing Pillar 3 framework. The second phase will expand the scope of the review to include standards that are currently under development or being revised, together with additional disclosure requirements to further improve the comparability of banks' risk profiles.
The Committee welcomes comments on this consultative document. An important aim of the review is to improve market discipline. The Committee therefore particularly welcomes feedback from investors, analysts, rating agencies and other users of Pillar 3 data, as well as from the audit community.
Comments on the proposals should be uploaded here by Friday 10 October 2014. Alternatively, comments may be sent by post to: Secretariat of the Basel Committee on Banking Supervision, Bank for International Settlements, CH-4002 Basel, Switzerland. All comments may be published on the website of the Bank for International Settlements unless a comment contributor explicitly requests confidential treatment.