We are finally nearing FRTB’s finish line, with implementation deadlines approaching rapidly in many jurisdictions. Once implemented, FRTB will represent the beginning of a new era for market risk management as it is intended to enhance the resilience of banks and the stability of the global financial system. FRTB will also mean banks will be faced with increases in overall capital requirements.
This white paper reviews three of the core issues and challenges that demonstrate some of the ways FRTB will impact the capital markets.
1. The questions raised by the FRTB implementation timelines.
2. The details and quirks of the two approaches for determining capital requirements: the standardised approach and the internal model approach.
3. The technology requirements and data challenges FRTB implementation represents.