Tougher measures on capital requirements proposed by the regulators


Global regulators on Thursday proposed new measures to toughen up the regime that governs capital requirements for banks’ trading books.

The Basel Committee on Banking Supervision issued a consultation paper proposing that banks use a standardised approach to determine how much capital they need to hold to cover trading book risks, as a backstop to calculations based on their own internal models.

The consultation document comes after regulators identified big discrepancies in the way risks in trading books are assessed.

In a statement the Basel committee said it wanted to see a “strengthened relationship between the standardised and the models-based approaches”.

This, it went on, is achieved by establishing a “closer calibration of the two approaches, requiring mandatory calculation of the standardised approach by all banks and requiring mandatory public disclosure of standardised capital charges by all banks, on a desk-by-desk basis.”

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