The Basel Committee on Banking Supervision developed the Basel II Accord with the aim of strengthening the soundness and stability of the banking system and promote the adoption of stronger risk management practices by the banking industry.
Basel II comprises three pillars:
- Minimum capital requirements
- Supervisory review
- Market discipline (disclosure)
Absa implemented Basel II from 1 January 2008. The market discipline (Pillar 3) sets out certain disclosure requirements and states that banks’ disclosures should be consistent with how Senior Management and the Board of Directors assess and manage the risks of the bank.
The Absa Pillar 3 disclosure document endeavours to cover the requirements relating to capital-adequacy, risk profile and risk management practices not covered in other public documents or arenas, and as far as these are prescribed by regulation 43. Where considered appropriate some additional information has been included in the document.