BCBS Publishes Responses to Consultation on Market Risk Standards
BCBS, on March 22, 2018, launched a consultation on revisions to the minimum capital requirements for market risk. The consultation period ended on June 20 and BCBS has published the 42 responses it had received to this consultation.
The proposals aim to address issues that BCBS had identified while monitoring the implementation and impact of the market risk standard that was issued in January 2016. Post this, BCBS had launched a consultation, in June 2017, on a simplified alternative to the standardized approach. The June 2017 consultation proposed a re-calibration of the Basel II standardized approach for banks with less material market risk exposure. The most recent consultation proposed the following changes:
- Changes to the measurement of the standardized approach to enhance its risk-sensitivity, including changes to foreign exchange risk
- Re-calibration of standardized approach risk-weights applicable to general interest rate risk, foreign exchange risk, and equity risk
- Revisions to the assessment process to determine whether a bank's internal risk management models appropriately reflect the risks of individual trading desks
- Clarifications on the requirements for identification of risk factors that are eligible for internal modeling
- Clarifications on the scope of exposures that are subject to market risk capital requirements
BCBS plans to finalize any revisions to the market risk standard as soon as possible to allow enough time for national implementation and for banks to develop the necessary infrastructure. The proposed revisions are designed to support smooth implementation of the standard. The implementation date of the market risk standard is January 01, 2022. Improvements to the capital requirements for trading activities are a key component of the Basel Committee's overall efforts to reform global regulatory standards in response to the global financial crisis.
Related Links
- Comments Received
- Press Release on Consultation
- Consultation Paper (PDF)
- FAQ on Market Risk Requirements
Keywords: International, Banking, Basel III, Market Risk, Capital Requirements, Standardized Approach, Responses to Consultation, BCBS
Featured Experts

María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer

Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.

Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
IFRS Publishes the Interpretations Committee Update for June 2019Related Articles
ISSB Sustainability Standards Expected to Become Global Baseline
The finalization of the two sustainability disclosure standards—IFRS S1 and IFRS S2—is expected to be a significant step forward in the harmonization of sustainability disclosures worldwide.
IOSCO, BIS, and FSB to Intensify Focus on Decentralized Finance
Decentralized finance (DeFi) is expected to increase in prominence, finding traction in use cases such as lending, trading, and investing, without the intermediation of traditional financial institutions.
BCBS Assesses NSFR and Large Exposures Rules in US
The Basel Committee on Banking Supervision (BCBS) published reports that assessed the overall implementation of the net stable funding ratio (NSFR) and the large exposures rules in the U.S.
Global Agencies Focus on ESG Data, Climate Litigation and Nature Risks
At the global level, supervisory efforts are increasingly focused on addressing climate risks via better quality data and innovative use of technologies such as generative artificial intelligence (AI) and blockchain.
ISSB Standards Shine Spotlight on Comparability of ESG Disclosures
The finalization of the IFRS sustainability disclosure standards in late June 2023 has brought to the forefront the themes of the harmonization of sustainability disclosures
EBA Issues Several Regulatory and Reporting Updates for Banks
The European Banking Authority (EBA) recently issued several regulatory publications impacting the banking sector.
BCBS Proposes to Revise Core Principles for Banking Supervision
The Basel Committee on Banking Supervision (BCBS) launched a consultation on revisions to the core principles for effective banking supervision, with the comment period ending on October 06, 2023.
US Proposes Final Basel Rules, Transition Period to Start in July 2025
The U.S. banking agencies (FDIC, FED, and OCC) recently proposed rules implementing the final Basel III reforms, also known as the Basel III Endgame.
FSB Report Outlines Next Steps for Climate Risk Roadmap
The Financial Stability Board (FSB) recently published the second annual progress report on the July 2021 roadmap to address climate-related financial risks.
EBA Plans on Ad-hoc ESG Data Collection and Climate Scenario Exercise
The recognition of climate change as a systemic risk to the global economy has further intensified regulatory and supervisory focus on monitoring of the environmental, social, and governance (ESG) risks.