Fundamental Review of the Trading Book

Published on:
November 12, 2015

SIFMA, along with other trade associations, developed and sent a letter to bank regulators and the Department of the Treasury expressing significant concern with the proposed capital requirements in the Basel Committee’s fundamental review of the trading book (FRTB). The letter expresses opposition to the proposed capital requirements, which are punitive to securitizations and other asset classes. If not materially amended the rules could threaten the liquidity and ability to fund credit creation of securitization markets. As mentioned below we understand that work is underway to recalibrate the proposal. The letter urges regulators to significantly amend the proposed requirements prior to any consideration of their implementation in the US, making clear that minor adjustments will not be enough.

SIFMA was joined by 6 other trade associations in this letter: The Commercial Real Estate Finance Council, Loan Syndications and Trading Association, Mortgage Bankers Association, National Association of Homebuilders, the Real Estate Roundtable, and the Structured Finance Industry Group.

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