BCBS published the updated framework for Pillar 3 disclosure requirements. These requirements, along with the updates published in January 2015 and March 2017, complete the Pillar 3 framework. The implementation deadline for the disclosure requirements related to Basel III is January 01, 2022, which accords with the implementation of the Pillar 1 (minimum capital requirements) framework.
The revised Pillar 3 framework reflects the changes and additions to the Pillar 3 framework arising from the finalization of the Basel III post-crisis regulatory reforms in December 2017. The disclosures framework covers the following areas:
- Credit risk, operational risk, the leverage ratio, and credit valuation adjustment (CVA) risk
- Risk-weighted assets (RWAs) as calculated by the bank's internal models and according to the standardized approaches
- An overview of risk management, RWAs, and key prudential metrics
The updated framework sets out new disclosure requirements on asset encumbrance and, when required by national supervisors at the jurisdictional level, on capital distribution constraints. In particular, the CVA disclosure requirements have been substantially streamlined. The implementation deadline for the disclosure requirements for asset encumbrance, capital distribution constraints, and the prudential treatment of problem assets has been extended by one year to the end of 2020.
Effective Date: January 01, 2022
Keywords: International, Banking, Basel III, Pillar 3, Disclosures, BCBS
Previous ArticleEBA Issues Revised List of Validation Rules for Reporting
ECB published a decision allowing the euro area banks under its direct supervision to exclude certain central bank exposures from the leverage ratio.
ESAs launched a survey seeking feedback on the presentational aspects of product templates under the Sustainable Finance Disclosure Regulation (SFDR or Regulation 2019/2088).
ECB published input of the European System of Central Banks (ESCB) into the EBA feasibility report on reducing the reporting burden for banks in EU.
ECB finalized the guide on assessment methodology for the internal model method for calculating exposure to counterparty credit risk (CCR) and the advanced method for own funds requirements for credit valuation adjustment (A-CVA) risk.
EBA published an Opinion addressed to EC to raise awareness about the opportunity to clarify certain issues related to the definition of credit institution in the upcoming review of the Capital Requirements Directive and Regulation (CRD and CRR).
APRA is consulting on updates to ARS 210.0, the reporting standard that sets out requirements for provision of information on liquidity and funding of an authorized deposit-taking institution.
FED released hypothetical scenarios for a second round of stress tests for banks.
FED is proposing to temporarily revise the capital assessments and stress testing reports (FR Y-14A/Q/M) to implement the changes necessary to conduct stressed analysis in connection with the re-submission of capital plans, using data as of June 30, 2020.
FED adopted a proposal to extend for three years, with revision, the information collection under the market risk capital rule (FR 4201; OMB No. 7100-0314).
EBA published a voluntary online survey seeking input from credit institutions on their practices and future plans for Pillar 3 disclosures on the environmental, social, and governance (ESG) risks.