Bank commodity VAR remains muted in Q4
Fourth-quarter results show low risk appetite continues to prevail at banks, reflecting tougher capital requirements and a continuing lack of trading opportunities, writes Jay Maroo
Difficult trading conditions and harsher capital rules have had an impact on banks active in the commodity derivatives market, with many reporting that their commodity value-at-risk declined or stayed constant in the fourth quarter of 2012.
The figures follow a trend of banks decreasing their risk in commodities over the past few years. In an effort to comply with more stringent Basel III capital rules, a number of banks have announced plans to trim risk-weighted assets (RWAs) across business
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