Proportionality under Pillar 2 of the Basel framework

With the post-crisis regulatory reforms now complete, there is value for the supervisory community to pay even more attention to Pillar 2 of the Basel framework. The expansion of Pillar 1 requirements under Basel III has expanded the supervisory review process and its interactions with Pillar 2. This paper surveys 16 jurisdictions (both BCBS and non-BCBS members) on their Pillar 2 implementation approaches, including their application of proportionality. Continued collaboration between jurisdictions, through the ongoing exchange of experience on the various methods used to implement Pillar 2, can facilitate a robust implementation of the post-crisis reforms.