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Wolters Kluwer Financial Services Urges Australian Banks to Examine Business Strategy Impact of FRTB 

November 11, 2015

Business Wire

Some Australian banks will need to reconsider their business strategy due to significant regulatory changes included in The Fundamental Review of the Trading Book (FRTB). That’s according to a new white paper by Wolters Kluwer Financial Services, titled “Fundamental Review of the Trading Book: Impact on Financial Institutions in Australia.”

The requirement to meet heightened risk and regulatory capital calculation obligations included in the FRTB may necessitate investing in new, sophisticated IT infrastructure. This will be costly and may force banks to completely re-assess their business plans, the white paper notes.

The FRTB is the latest revision of trading book capital rules by The Basel Committee for Banking Supervision that aims to ultimately reduce global financial risk. It deals with what it considers to be weaknesses in the current design of the regulatory capital framework as it relates to the trading book by applying more rigorous qualification requirements for the trading and banking books, seeking changes in the constitution of both.

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