Bis 2 Information

The third pillar dictates that banks should publish the outcome of their risk calculations and also their methodology. The idea behind this requirement is that the market will guide the banks towards a set of well established methodologies, thereby making the capital requirements stable throughout the banking world.

The third pillar requires banks to publish the outcome of several calculations and risk estimates, but also the methods and assumptions used to make those calculations. In other words banks need to publish qualitative information and quantitative information. Investors can use both to determine whether:

• the banks risk management is sound,
• the banks risk profile is acceptable,
• the banks capital buffer is adequate,
• all these items have been properly determined (and calculated).