G-Sibs eye simpler market risk calculations in Hong Kong

HKMA may need to ease rules on NMRFs to incentivise use of internal models


Global banks in Hong Kong are treading a fine line in seeking a simplified standardised approach to calculating market risk capital for their trading books – and avoiding the use of internal models because of limited potential cost savings for local subsidiaries.

But the Hong Kong Monetary Authority (HKMA) may not be aligned with their thinking – and Hong Kong’s small group of global systemically important banks (G-Sibs) might need to reconsider.

“Some of the G-Sibs are indicating that they

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