ISDA published a statement that outlines challenges in implementation of the new Basel III market risk standard for banks in emerging markets. The statement highlights that there are uncertainties about how the rules will be transposed and whether all jurisdictions will meet the 2022 implementation target set by BCBS.
The statement mentions that the challenges posed by the implementation of the market risk standard for banks in emerging markets include barriers to entry, shortage of data, and concerns about the treatment of sovereign debt. While it is important for the framework to be implemented as consistently as possible, it is also imperative that regulators and market participants monitor and understand the impact on emerging market banks and economies. As per the statement, most jurisdictions in Asia Pacific, including China and India, have not yet set out any plan for the transposition and implementation of the fundamental review of trading book (FRTB) standard. However, Hong Kong appears to be aiming for compliance with the 2022 timeline set by BCBS, following indications from HKMA that it will publish a consultation on the FRTB in 2019. Singapore and Australia are also expected to follow the global timeline, but there has not yet been any public information from regulators. Furthermore, EU has proposed going live with a two-step approach, starting with reporting requirements and moving subsequently to binding capital requirements, which will form part of a separate legislative proposal.
Keywords: International, Banking, Market Risk, FRTB, Capital Requirements, Basel III, Emerging Markets, BCBS, ISDA
Previous ArticleFED Updates Form and Supplemental Instructions for FR Y-9C Reporting
BIS published a paper that provides an overview on the use of big data and machine learning in the central bank community.
APRA finalized the reporting standard ARS 115.0 on capital adequacy with respect to the standardized measurement approach to operational risk for authorized deposit-taking institutions in Australia.
ECB published a guide that outlines the principles and methods for calculating the penalties for regulatory breaches of prudential requirements by banks.
MAS and The Association of Banks in Singapore (ABS) jointly issued a paper that sets out good practices for the management of operational and other risks stemming from new work arrangements adopted by financial institutions amid the COVID-19 pandemic.
ACPR announced that a new data collection application, called DLPP (Datalake for Prudential), for collecting banking and insurance prudential data will go into production on April 12, 2021.
BCB announced that the Financial Stability Committee decided to maintain the countercyclical capital buffer (CCyB) for Brazil at 0%, at least until the end of 2021.
EIOPA has launched a European-wide comparative study on non-life underwriting risk in internal models, also kicking-off of the data collection phase.
SRB published an overview of the resolution tools available in the Banking Union and their impact on a bank’s ability to maintain continuity of access to financial market infrastructure services in resolution.
EBA is consulting on the implementing technical standards for Pillar 3 disclosures on environmental, social, and governance (ESG) risks, as set out in requirements under Article 449a of the Capital Requirements Regulation (CRR).
ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting