Basel Issues Final Set of Pillar 3 Disclosure Requirements

The Basel Committee on Banking Supervision today issued updated Pillar 3 disclosure requirements reflecting the “Basel IV” capital framework released in December 2017. Today’s updates, along with revisions issued in 2015 and 2017, “complete the Pillar 3 framework,” the committee said.

The revised requirements — which generally apply only to U.S. banking firms with more than $250 billion in assets — address topics raised in the Basel IV framework, including credit risk, operational risk, the leverage ratio, credit valuation adjustment risk, and prudential metrics. They also lay out new disclosure expectations on asset encumbrance and — when required by national-level regulators — capital distribution constraints. In addition, the CVA disclosure requirements “have been substantially streamlined” from what was originally proposed due to public feedback from ABA and the Bank Policy Institute and others.

The target for national regulators to implement the Basel IV-related disclosure requirements is Jan. 1, 2022; meanwhile, the deadline for regulators to implement requirements on asset encumbrance, capital distribution constraints and the prudential treatment of problem assets was extended to the end of 2020. For more information, contact ABA’s Rob Strand.