FRTB could hit syndicated loans, banks fear

Accounting classification would lump assets into regulatory trading book

added costs
Adding up: new accounting classifications could hit syndicated loans

Syndicated loans may fall foul of new accounting classifications that bucket them in dealers’ trading books – causing them to swallow punitive market risk capital charges for assets they argue belong in banking books.

Interplay between the incoming International Financial Reporting Standard 9’s (IFRS 9) accounting standards and the market risk capital rules of the Basel Committee on Banking Supervision’s Fundamental Review of the Trading Book (FRTB) has sown confusion among market participants.

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