While challenges remain in making such measures comparable or differences across institutions well understood, such disclosures are a necessary complement to the other two pillars for the overall approach to retain the necessary level of rigor and integrity.
Disclosure of information that helps stakeholders determine risk profiles is designed, of course, to increase, when necessary, the market pressure and costs on bank lenders that they would otherwise receive as a matter of course if they were not beneficiaries of the safety net. Market discipline can also provide useful signals to supervisors.