Basel's forgotten pillar: The myth of market discipline on the forefront of Basel III

Artikel

Although Basel II fortified the first two pillars with market transparency enhancing Pillar III disclosures and encouraged the usage of major Credit Rating Agencies (CRAs) such as Moody's, Standard and Poor's, and Fitch as quasi governmental authorities to overcome asymmetric informational problems on risk and capital adequacy fronts of the global financial system, the recent global financial crisis has proven just the opposite. The banks and regulators were not in a position to truly assess the risk and capital adequacy frameworks of the global and domestic financial institutions based on the assessments of the rating agencies. To overcome the problem of informational asymmetry for the market participants, the Basel Committee on Banking Supervision set out new proposals for enhanced Pillar III disclosures in the areas of credit risks and capital reporting standards on the forefront of Basel III that would come into effect on April 1, 2016. This paper is a critical evaluation of the new reporting proposals of BCBS within the critical role of the credit rating agencies.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: e-Finanse: Financial Internet Quarterly ; ISSN: 1734-039X ; Volume: 11 ; Year: 2015 ; Issue: 3 ; Pages: 70-91 ; Rzeszów: University of Information Technology and Management

Classification and Topics

• Classification: Wirtschaft ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Investment Banking; Venture Capital; Brokerage; Ratings and Ratings Agencies ; Financial Institutions and Services: Government Policy and Regulation
• Subject: Market Transparency ; Basel II Pillar III ; Bank Risk and Capital Reporting ; Credit Rating Agencies ; Expected Default Frequency (EDF) ; Moody’s Analytics

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Benli, Vahit Ferhan
• Event: Veröffentlichung
• (who): University of Information Technology and Management
• (where): Rzeszów
• (when): 2015

Further information

• DOI: doi:10.14636/1734-039X_11_3_006
• Handle: http://hdl.handle.net/10419/147133
• Last update: 10.03.2025, 11:44 AM CET