The members of the EACB appreciate the Commission’s initiative for a consultation on proportionality aspects linked to implementation offuture market risk capital requirements and the review of the original exposure method.
Like no other standard of the BCBS, the substance of the “Fundamental Review of the Trading Book” is targeting large international banks, where market risk has importance and dimension. Today the overwhelming majority of small cooperative banks does not have a trading book, since the dimension of market risk in the context of their business model is not relevant and thus does not require it. We also do not know of any evidence about deficits regarding the management of market risk in smaller cooperative banks, which would make the introduction of trading books in smaller institutions advisable. The introduction of a trading book as designed according to the new Basel standard would go beyond the capacities of smaller institutions and even be completely inappropriate from a cost perspective.
We thus welcome the opportunity to comment on this DGFISMA consultation on the application of proportionality. The final outcome should be proportionate solutions, which are both simple and pragmatic.
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