Banks see clash in Basel's trading and banking book work

Draft rules on interest rate hedging could set back arbitrage fix, critics claim

clash-boxing-opposites

Banks are warning that the Basel Committee on Banking Supervision's draft rules on banking book interest rate hedges could encourage the kind of behaviour a different working group is trying to eradicate.

The committee's December 2014 Fundamental review of the trading book (FRTB) proposal imposes new restrictions on so-called internal transfers of risk between the banking book and trading book. Banks claim this will make hedging more costly and could incentivise the industry to keep risk in the

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