or ‘ pillars ’ of the new capital accord. that also goes for the new european capital adequacy directives. pillar 3 recognises that market discipline has the potential to reinforce and support minimum capital standards ( pillar 1 ) and the supervisory review process ( pillar 2 ). this way, it helps to ensure that banks maintain appropriate levels of capital as a cushion against potential future losses arising from risk exposures. pillar 3 contains proposals for greater disclosure by banks, pertaining to three broad categories, the so - termed scope of application of the accord, a bank ’ s capital adequacy, and its risk exposures and assessments. for essential elements of the new capital accord, such as the use of an internal ratings based approach ( irb ), disclosures will even be required for supervisory recognition. this means that a supervisor is not supposed to recognize the use by a bank of these techniques, unless the bank has met the disclosure requirements. in this respect, in addition to pillar 1 with its irb, pillar 3 marks the transition to a fundamentally new approach in prudential supervision. as to the content of the information, pillar 3 aims to provide for a comprehensive set of consistent and comparable disclosures. it should, in other words, establish a common framework for the information to be made available by banks, and that would allow a meaningful comparative analysis by recipients of that information. comparability is greatly enhanced by the use of the risk weighting methodologies in the context of pillar 1 as a common yardstick for the purpose of public disclosure. at the same time, however, pillar 3 should not become overly prescriptive. that is why pillar 3 attaches great importance to qualitative disclosures. this will allow a specific bank to explain and elaborate the particular characteristics of its operations in plain language. an interesting dimension to the development of the pillar 3 disclosures is the relationship vis - a - vis the accounting standards, and vis - a - vis listing requirements promulgated by securities regulators. as i have said before, the costs of public disclosures by banks should be limited. therefore, banks may rely on disclosures under accounting or listing requirements insofar as these are materially equivalent to pillar 3 requirements. however, such requirements have a broader focus than the third pillar, which aims at banks capital adequacy. pillar 3, in other words, is a more specific interpretation of the general rules, as a reflection of its more precise objective. supervisors

bonds which are held to maturity on banks'balance sheets – should those unrealised losses be better reflected in the capitalisation of banks? and should we look at how instruments, that are not marked to market daily, are reflected in liquidity buffers? i don't have an answer to these questions. but i do think they should be addressed. so that we can learn everything there is to learn from what happened at svb. and of course, not only what happened at svb. because the problems at svb soon led the financial market to look at other banks – banks with the same combination of vulnerabilities, like first republic. these market concerns also found their way across the atlantic, to this side, to credit suisse, a bank that has suffered from a series of mismanagement problems in recent years, and that experienced previous outflows of deposits at the end of 2022. here, too, we witnessed a rapid succession of events. it took, almost literally, only one tweet to lead to the downfall of credit suisse. because, once an alleged s. o. s. was on the wire, additional deposit outflows quickly followed, credit suisse's share price fell, and its cds spread spiked. in the end, the swiss national bank provided additional liquidity assistance, and credit suisse was sold to ubs. 3 / 5 bis - central bankers'speeches finma, the swiss supervisor, used a supervisory, and not a resolution power, to enable this sale – and it came with a write - down of credit suisse's at1 securities. although the possibility of such a principal write - down was included in the relevant at1 prospectuses and mentioned on the bank's investor relations page, although investors were clearly informed that extraordinary public support could lead to such a write - down, and that at1 holders may suffer losses before equity holders, and although the coupons paid on the at1 - security well exceeded the roe - target credit suisse had communicated to its investors, finma's decision still took investors by surprise. this should encourage regulators to reflect on the role and functioning of at1 instruments in determining the capital position of banks. but let's go back a step, and ask : why not use resolution? or, with alfred nobel in mind, what similarities or differences with previous cases led to this strategy? in the aftermath of the global financial crisis, resolution framework