The Basel group drafts new bank trading-book rules
The Basel Committee on Banking Supervision proposed to toughen its bank trading-book rules for banks, according to a Bloomberg report.
The committee, which is comprised of 27 nations including China, the US and the UK, had proposed to overhaul its current bank-trading book rules. The move was to standardize the criteria for lenders to determine the level of risk to consider in an investment. The proposed changes would ensure that banks would be overseen on matters of taking investment risks. The draft of the new trading-book rules included global capital rules on swaps, bonds and securities.
In a statement on its website last Wednesday, the Basel Group expected the draft rules would capture the different losses banks might suffer in case another global financial crisis occurs.
Banking regulators were still waiting for a more comprehensive revision of global rules on how they could capture banks' trading-book risks. Bankers blamed the previous rounds of Basel rules for its flexible implementation.