 The FRTB: Do not underestimate the standardised approachNicola Hortin Journal of Securities Operations & Custody, 2016, vol. 8, issue 3, 197-200 Abstract: There is currently a lot of discussion in the industry about the internal model-based approach to the FRTB; however, it is important that banks do not underestimate the challenges of implementing the FRTB standardised method, particularly as it will impact all institutions including those that adopt the internal approach. Among the significant changes that are being introduced by the FRTB is a stricter separation of the trading book and banking book. Regardless of whether they currently use standardised or internal models, banks will need to review their portfolios to determine if existing classifications of instruments and desks as trading book or banking book are still applicable or whether a revision of desk structure is required. While doing all of the above, it is important that banks do not lose sight of the wider context in which the FRTB requirements are being introduced. The FRTB is just one element in a package of new capital adequacy rules. The changes that are being made to the capital adequacy rules are so fundamental and so numerous that, although they are part of Basel III, some people are now referring to them as ‘Basel IV’. Keywords: FRTB; BIS; capital adequacy; standardised approach; Basel III (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:aza:jsoc00:y:2016:v:8:i:3:p:197-200 Access Statistics for this article More articles in Journal of Securities Operations & Custody from Henry Stewart Publications |
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