Permanent FRTB reforms seen as vital for IMA adoption
Temporary relief granted in June has done little to encourage internal model use in Europe
The European Commission’s eagerly awaited package of permanent reforms to the Fundamental Review of the Trading Book (FRTB) could radically alter the calculus for banks as they decide whether to adopt the internal models approach (IMA).
Temporary relief measures introduced in June and due to expire at the end of 2029 failed to encourage wider IMA adoption among European banks.The FRTB will begin to apply in the European Union from the start of next year, along with the temporary relief measures.
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