How to solve the Fed’s $300bn FRTB problem
A sacrifice will have to be made to ensure new market risk rules meet demands for capital neutrality
Regulators began their odyssey to craft new trading book capital rules in 2012. As the mythical Greek hero discovered during his epic homeward journey, the destination is taking longer to reach than planned.
The voyage faces one further obstacle: the long-delayed US implementation of the Basel III regime. Bankers and politicians in the laggard nation are lobbying for the rules not to increase capital requirements for US banks.
To meet this call, US regulators would need to overcome what the
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