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Version date: 15 December 2019 - onwards

SRP99 Application guidance (paras. 99.1-99.10) (effective as of 15 December 2019)

This chapter contains additional guidance on supervisory transparency and cross-border cooperation. It also provides references to other Basel Committee guidelines that support supervisory review under Pillar 2 and additional considerations for the application of Pillar 2 to systemically important banks.

Version effective as of 15 Dec 2019

First version in the format of the consolidated framework.

Supervisory transparency and accountability

99.1 The supervision of banks is not an exact science, and therefore, discretionary elements within the supervisory review process are inevitable. Supervisors must take care to carry out their obligations in a transparent and accountable manner. Supervisors should make publicly available the criteria to be used in the review of banks' internal capital assessments. If a supervisor chooses to set target or trigger ratios or to set categories of capital in excess of the regulatory minimum, factors that may be considered in doing so should be publicly available. Where the capital requirements are set above the minimum for an individual bank, the supervisor should explain to the bank the risk characteristics specific to the bank which resulted in the requirement and any remedial action necessary.

Enhanced cross-border communication and cooperation

99.2 Effective supervision of large banking organisations necessarily entails a close and continuous dialogue between industry participants and supervisors. In addition, the Framework will require enhanced cooperation between supervisors, on a practical basis, especially for the cross-border supervision of complex international banking groups.