In order to promote the desired market discipline within the meaning of Pillar III of the Basel Accord, credit institutions must prepare a disclosure report on a regular basis and publish it close to the annual report or, since the end of 2017, the respective interim financial report.
Whereas in the past the requirements were formulated qualitatively and the actual design was largely left to the reporting institution, the latest revision of the requirement by the Basel Committee added a large number of standardized tables and templates. In addition to the reconciliation of equity, which has always been necessary, a reconciliation of risk-weighted assets for individual balance sheet positions is now also required.
In addition to the actual determination of the values, ICS steps should also be implemented in the determination process to ensure the quality of the published data. In addition, new disclosure requirements in particular raise the question of whether and what interactions they might have with internal controlling or with queries from analysts and rating agencies. Here it is necessary to be prepared for disenfranchising eventualities.
Further Disclosure Requirements due to CRR & Basel IV
In addition to the disclosure requirements already implemented by the EU, there are other requirements – especially for liquidity risks, which will become binding for all institutions under CRR. The finalization of Basel III and other possible Basel IV amendments is also expected to lead to a further expansion of disclosure requirements in the future.
FAS Support in Disclosure Reports
FAS AG supports credit institutions in the preparation and design of the disclosure report. Our experienced consultants act both in the editorial design within the framework of regulatory requirements and in the definition of data sources and processes for the collection and compilation of the information required for the disclosure report. In addition, FAS AG supports the coordination and harmonization with other reporting requirements, for example, in the context of the annual report, regulatory reporting to the supervisory authority and integrated reporting.
If you are interested or have any questions, please contact us.