Models could lose appeal under new trading book rules
Panellists expect capital and complexity to jump under revised trading book regime, removing the incentive to obtain modelling approval
Fewer banks will seek approval to model their trading book capital requirements if a review of the current framework results in higher capital levels and a heavier workload, panellists at the Trading and Investment Risk conference in London warned this morning. That would be "a loss for the banking industry", according to Manoj Bhaskar, global head of regulatory and risk analytics at HSBC.
In some cases, banks that are already licensed to use the internal models approach (IMA) might revert to
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