FRTB – Special report 2019
Light is beginning to emerge at the end of the tunnel for the Basel Committee on Banking Supervision’s Fundamental Review of the Trading Book (FRTB).
The first iteration of the revised framework was published in January 2016, with an implementation date of January 2019. However, that go-live date was pushed back to the start of 2022 on completion of the Basel III reforms.
The changes will likely bring consequences, say market participants. The updated framework reinforces the divide between trading and banking books, shakes up the approval process for the internal models approach and provides a more risk-sensitive standardised approach.
Even with a two-and-a-half-year window, a year is likely needed for model approval, and up to another before that for parallel runs, making 2019 the year for banks to decide how they will implement FRTB.
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