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PILLAR 3- MARKET DISCIPLINE
What is Pillar 3 of the Basel II/III framework?
Pillar 3 is Market Discipline, which requires banks to publicly disclose key information about their risk exposures, capital adequacy, and risk management practices to enable market participants to assess the bank's soundness.
What is the core principle behind Pillar 3 market discipline in Basel framework?
Public disclosure enables market participants to assess bank risk.
What is the primary objective of Pillar 3 under Basel III?
The primary objective is to complement Pillar 1 (minimum capital requirements) and Pillar 2 (supervisory review) by promoting transparency through public disclosure, allowing the market to discipline banks that take excessive risks.
What is the minimum frequency for qualitative Pillar 3 disclosures under Basel III?
Qualitative disclosures are required annually at minimum.
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