2908 system 3 accunt ich sets out the process by which a

harges for many activities, particularly involving coun- terparty risk and (c) narrow the scope of what constitutes Tier 1 (T1) and Tier 2 (T2) capital. The Basel framework (continues to) consists of three pillars: Pillar 1 is the part of the new Basel Accord, which sets out the calculations of regulatory • capital requirements for credit, market and operational risk. Pillar 2 is the part of the new Basel Accord, which sets out the process by which a bank • should review its overall capital adequacy and the process under which the supervi- sors evaluate how well financial institutions are assessing their risks and take appro- priate actions in response to the assessments. Pillar 3 is the part of the new Basel Accord, which sets out the • disclosure require- ments for banks to publish certain details of their risks, capital and risk manage- ment, with the aim of strengthening market discipline. This is intended to impr