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Basel Committee Releases Market-Risk Revamp

Banks face stiffer capital rules on swaps, bonds, and other securities they intend to trade.

By Boris Groendahl, Bloomberg | Updated on January 15, 2016

Banks face tougher capital requirements on swaps, bonds, and other securities that they intend to trade, as global regulators tighten market-risk rules for the second time since the financial crisis.

The Basel Committee on Banking Supervision, whose members include the U.S. Federal Reserve and the People’s Bank of China, said updated rules published on Thursday will result in a weighted mean increase of about 40 percent in trading-book capital charges. The revised framework boosts the share of banks’ risk-weighted assets produced by market risk to nearly 10 percent, from about 6 percent under existing rules, the Basel group said in a statement.

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