FRTB: The next in line for BASEL market risk rules
Finally, all the meetings and discussions for all these years proved to be successful! On January 14, 2016, The Basel Committee of Banking Supervision (BCBS)introduced its first publication of Fundamental Review of Trading Book (FRTB). Still, since there has been no updating of the ruleset, over these six years, it has been quite a trouble for the banks to grapple a myriad of challenges related to the future generation of the market risk framework. So, after a lengthy discussion of five years with particular reference to quantitative impact studies (QIS), BCBS has been able to finalize and implement the new rules on December 31, 2019. Though apex banks, namely U.S. FED, FRB, ECB, and BoE, were asked to perform the new FRTB by January 1, 2019. This new set of rules will impact the trading book definition profoundly. The other areas that will benefit are risk assessment and management and reporting to various FIs across the globe.