What is the goal of CRD Basel Pillar 2?

The goal of CRD Basel Pillar 2 is to establish constructive dialogues about risk management. This regulatory framework emphasizes a bank's need to have a comprehensive approach to risk assessment and management that goes beyond mere compliance with minimum capital requirements set out in Pillar 1. Pillar 2 requires institutions to evaluate their own capital adequacy in relation to their risk profiles and to engage in discussions with regulators about their risk management strategies and how they align with regulatory expectations.

This dialogue involves providing a thorough internal assessment of both current and forward-looking risks that the institution may face, allowing for more tailored regulatory oversight and encouraging banks to take a proactive approach in understanding and managing their risks. By fostering a constructive conversation, regulators can ensure that banks maintain adequate risk controls and capital buffers, ultimately contributing to the stability of the financial system.

The other options focus on functions not aligned with the core objectives of Pillar 2. Setting market prices for financial products relates to market dynamics rather than regulatory risk management. Defining operational roles focuses on organizational structure rather than the risk assessment dialogue emphasized in Pillar 2. Creating marketing strategies is unrelated to risk management standards and the overarching aims of the Basel framework.