On 2 March 2020, the European Banking Authority (EBA) published a report assessing institutions’ Pillar 3 disclosures. The report aims to identify best practices and potential areas for improvement.

The EBA assessment covers 12 systemically important credit institutions. It is based on the end -2018 disclosure reference date, with some extended and partial assessment of the disclosures as of June 2019. The report is based on the subset of standards included in the EBA guidelines on disclosure requirements under Part Eight of the Capital Requirements Regulation.

The EBA observes that institutions are on the correct path towards achieving consistency and comparability through the implementation of common disclosure formats, accompanied by qualitative explanations that help communicate meaningful prudential information. However, the EBA has found room for improvement citing the following that may hamper the ability of users to access, understand and compare the information:

  • omission of information without any indication of the reasons;
  • unclear identification and location of Pillar 3 reports that hinders the ability of users to find them;
  • lack of consistency in the structure of Pillar 3 reports and of some of the information reported, particularly qualitative information;
  • oversimplification of interim reports compared to end-of-year reports; and
  • lack of reconciliation of quantitative information across disclosure templates or inconsistent ways to calculate quantitative flows of information.