The rationale underlying Pillar 3 is that adequate disclosure should allow market participants to assess an entity's capital adequacy. To this end institutions need to disclose information on the scope of application, capital, risk exposures, and risk assessment processes at the highest level of consolidation. The report notes as an 'area of concern' the interrelationship between Pillar 3 disclosures and accounting disclosures under IFRS 7.
"Dealing with the relationship with accounting is of great importance to ensure that the accounting and Pillar 3 disclosures are to the largest extent consistent or at least not such that they lead to major inconsistency problems."
The survey found that, at the moment, EU countries have refrained from taking measures (either official or informal) in this respect, though many countries indicated that disclosures made in the public financial statements as a result of IFRS 7 do not need to be repeated for the purpose of Pillar 3 compliance. Two countries said that they may issue guidance on this matter. Click for: