Pillar 3
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Banking - regulation.
(P3).
Pillar 3 is the element of banking supervision which engages with 'market discipline'.
Banks are required to make enhanced qualitative and quantitative disclosures of how they calculate their regulatory capital ratios, and to provide reconciliations to their reported accounting information.
The idea is that those following better practice will enjoy lower-cost funding from the market, thereby encouraging best practice over time, via the market mechanism.
