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BCBS (2012)Consultative Document: Fundamental Review of the Trading Bookhere

Executive Summary

"This consultative document presents the initial policy proposals emerging from the Basel Committee's ("the Committee") fundamental review of trading book capital requirements. These proposals will strengthen capital standards for market risk, and thereby contribute to a more resilient banking sector. The policy directions set out in this paper form part of the Committee's broader agenda of reforming bank regulatory standards to address the lessons of the financial crisis. These initial proposals build on the series of important reforms that the Committee has already delivered through Basel III and set out the key approaches under consideration by the Committee to revise the market risk framework. These proposals also reflect the Committee's increased focus on achieving a regulatory framework that can be implemented consistently by supervisors and which achieves comparable levels of capital across jurisdictions. The Committee's policy orientations with regard to the trading book are a vital element of the objective to achieve comparability of capital outcomes across banks, particularly those which are most systemically important."


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