BANKING AFFAIRS

Detailed explanation-1: -It is based on three main “pillars": minimum capital requirements, regulatory supervision, and market discipline.

Detailed explanation-2: -The Basel Committee issued a final package of measures to enhance the three pillars of the Basel II framework and to strengthen the 1996 rules governing trading book capital.

Detailed explanation-3: -Pillar 3 aims to ensure market discipline by making it mandatory to disclose relevant market information. This is done to make sure that the users of financial information receive the relevant information to make informed trading decisions and ensure market discipline.

Detailed explanation-4: -It is a principles-based standard premised on sound supervisory judgment to ensure that banks have sound internal processes in place and use appropriate risk management techniques to support their businesses. Pillar 2 can be tailored to the risks, needs and circumstances of a particular jurisdiction and bank.

Detailed explanation-5: -Basel 3 is composed of three parts, or pillars. Pillar 1 addresses capital and liquidity adequacy and provides minimum requirements. Pillar 2 outlines supervisory monitoring and review standards. Pillar 3 promotes market discipline through prescribed public disclosures.