Higher transparency requirements after the financial crisis

One lesson from the global financial crisis was that banks around the world needed to become more transparent. Banks' operations and financial products had been becoming more complex for some time. This made it more difficult for investors to assess the risk profile of banks. This weakened market discipline was a contributing factor to the global financial crisis. After the financial crisis, the Basel Committee, which develops global standards on capital and liquidity, undertook a major revision of the transparency requirements for banks - Pillar 3. Transparency requirements are now higher in several areas such as credit risk, market risk, liquidity risk and operational risk.

Published: 3 November 2022