Public disclosure in the sense of Basel II refers to the obligation of banks to publish information on their business and risk parameters.
This regulation aims to increase transparency with regard to the risk situation of banks and to ensure better comparability between banks. Disclosure is one of the pillars of Basel II and is also referred to as market discipline.
Under public disclosure, banks must disclose a range of information, including quantitative and qualitative disclosures. Quantitative disclosures may include, for example, information on risk-weighted assets, capital, income and costs.Qualitative disclosures may include information on business strategy, risk management procedures and internal controls.
Public disclosure is intended to enable investors and other stakeholders to assess the risk situation of banks and make informed decisions. Disclosure also creates incentives for banks to improve their risk management procedures and manage risks appropriately.
The disclosure requirements apply to all banks regulated by supervisors. The exact requirements may vary between supervisors and jurisdictions. Banks must ensure that the information they disclose is accurate, complete and understandable. Supervisors monitor compliance with disclosure requirements and can impose sanctions for violations.
