Discord deepens over fund-linked trades in FRTB

More banks use punitive approach to capital treatment under new trading book regime, irking regulators

Hostilities are spreading to a new front in the grinding war of attrition between banks and their regulators over revised capital rules for banks’ trading books. The cause of the latest quarrel is the way that banks calculate their exposure to fund-linked derivatives trades.

Supervisors have cast doubt on the reliability of financial submissions from banks that have opted to apply the most punitive approach to calculating requirements for these exposures.

In their regular quantitative impact

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