As such, it can provide a more complete picture of banks’ performance and capital needs. It can therefore lead to more realistic 2/4  BIS central bankers' speeches  results for policy use.
To address negative externalities posed by domestic systemically important banks (DSIBs), capital surcharges are imposed on DSIBs. This is largely driven by their concentrated market position, similar business models and entrenched interconnectedness with major counterparties. This surcharge also covers an implicit Pillar 2 component, while a detailed design of Pillar 2 framework is being finalized.