The part of Basel capital rules under which supervisors review a bank's own risk assessment and can require extra capital. It covers risks that Pillar 1 does not.
Where you will meet it
Pillar 2 comes up in 3 learning outcome notes across the FRM syllabus.
A few of them:
Banks FRM Part I · Financial markets and products
“They were minimum capital for credit, market and operational risk, supervisory review, and market discipline through disclosure.”
Capital Regulation Before the Global Financial Crisis FRM Part II · Operational risk and resilience
“Pillar 2 is supervisory review.”
Capital Regulation Before the Global Financial Crisis FRM Part II · Operational risk and resilience
“Pillar 2 covers governance and the own risk and solvency assessment.”
GARP does not endorse, promote, review, or warrant the accuracy of the products or services offered by Charta Learning, nor does it endorse any pass rates claimed by Charta Learning. Further, GARP is not responsible for any fees or costs paid by the user to Charta Learning. FRM® and GARP® are registered trademarks owned by the Global Association of Risk Professionals, Inc. The questions, explanations and study notes are written for this product and are not GARP curriculum material.