According to the International Swaps and Derivatives Association (ISDA), the rise in capital requirements for bank trading activities under Basel III Endgame in the US could have a negative impact on the vitality of US capital markets. ISDA, along with the Securities Industry and Financial Markets Association (SIFMA), has responded to the Federal Reserve's notice of proposed rulemaking (NPR) expressing concern.
The associations highlight that the increase in capital requirements for bank trading activities does not accurately reflect the underlying risks and may lead to higher costs and limited options for US businesses.
ISDA also points out that the implementation of the Fundamental Review of the Trading Book (FRTB) and the revised credit valuation adjustment (CVA) framework would result in a significant 129% increase in market risk and CVA risk-weighted assets (RWAs) under the new expanded risk-based approach (ERBA), compared to the current US standardised approach.
According to the International Swaps and Derivatives Association (ISDA), the rise in capital requirements for bank trading activities under Basel III Endgame in the US could have a negative impact on the vitality of US capital markets. ISDA, along with the Securities Industry and Financial Markets Association (SIFMA), has responded to the Federal Reserve's notice of proposed rulemaking (NPR) expressing concern.
The associations highlight that the increase in capital requirements for bank trading activities does not accurately reflect the underlying risks and may lead to higher costs and limited options for US businesses.
ISDA also points out that the implementation of the Fundamental Review of the Trading Book (FRTB) and the revised credit valuation adjustment (CVA) framework would result in a significant 129% increase in market risk and CVA risk-weighted assets (RWAs) under the new expanded risk-based approach (ERBA), compared to the current US standardised approach.
