In addition, on the basis of their knowledge of industry practices at a range of institutions, supervisors should provide constructive feedback to bank management on these internal assessments. Finally, Pillar 3 seeks to complement these activities with stronger market discipline by requiring banks publicly to disclose key measures related to their risk and capital positions.
The concept of these three mutually reinforcing pillars has been central to the Basel II effort. Scope of application in the United States The U.S. supervisory agencies will propose that most banking organizations in this country remain under the existing Basel I-type capital rules and would continue to have no explicit capital charge for operational risk.