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The Pillar 3 disclosure requirements add greater detail to the guidance on this topic that was included in the supplemental Pillar 2 guidance issued by the Committee in July 2009. The proposals cover the main components of sound remuneration practices for banks and take full account of the Financial Stability Board's Principles for Sound Compensation Practices and their related Implementation Standards.

The Basel Committee believes that these disclosure requirements, developed in consultation with the Financial Stability Board, will support effective market discipline by allowing market participants to assess the quality of a bank's compensation practices and the incentives towards risk taking they support.