In my Jan. 12, 2011, column, I discussed the issuance by the Basel Committee of new capital and liquidity requirements and noted, inter alia, that banks would need to provide a full reconciliation of all regulatory capital elements back to the balance sheet in their audited financial statements, list separately all regulatory adjustments and items not deducted from Common Equity Tier 1, and provide information on the main features and full terms and conditions of all instruments included in regulatory capital.1 On Dec. 19, 2011, the Basel Committee issued a consultative document containing the proposed capital disclosure requirements, noting that the purpose of the requirements was to “aim to improve the transparency and comparability of a bank’s capital base” for market participants.2
On June 26, 2012, the Basel Committee issued the final capital disclosure requirements.3 The requirements have been adopted substantially as proposed. This month’s column will discuss these final requirements, which will need to be adopted by each country to be effective no later than June 30, 2013. Internationally active banks should be aware of these changes and begin to plan accordingly.
