FRTB: the nightmare before Christmas

A long-awaited Basel Committee review of trading book capital rules is nearing its conclusion. That is worrying banks, which point to major outstanding problems with the framework. But supervisors argue a simple recalibration is all that is necessary

Christmas bomb
Basel's FRTB rules are threatening to blow up on banks

Banks are scared stiff about the likely outcome of the Basel Committee on Banking Supervision's review of trading book capital rules, which is expected in December. Although the Fundamental review of the trading book (FRTB) has been through three iterations and four quantitative impact studies (QISs) since 2012, industry sources say there remain serious outstanding problems with the committee's proposals. But despite this, supervisors seem destined to finalise the rules largely as they currently

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