The European Commission has launched a targeted consultation on the European Union’s prudential framework for banks’ market risk, the Basel III Fundamental Review of the Trading Book (FRTB), seeking input on changes intended to limit negative capital impacts for EU banks while major jurisdictions finalise their own implementations. Delegated acts have already postponed application of the FRTB market risk rules under the Capital Requirements Regulation until 1 January 2027, using the maximum extension available and citing delays or deviations in other jurisdictions and the need to preserve a level playing field in trading activities. The consultation focuses on a potential delegated act that would apply for three years ending in 2029 and would combine targeted adjustments in areas where other jurisdictions have deviated or plan to deviate with a targeted “multiplier” to neutralise adverse capital effects, with stakeholders invited to comment on a design that is straightforward, risk-sensitive, and easy to implement, maintain, and supervise. The consultation runs until 6 January 2026.
European Commission 2025-11-06
European Commission launches consultation on FRTB market risk rules after delaying EU implementation to 1 January 2027
The European Commission has initiated a consultation on the EU's prudential framework for banks' market risk under the Basel III Fundamental Review of the Trading Book (FRTB). This seeks to mitigate negative capital impacts for EU banks amid global implementation delays. A potential delegated act could apply until 2029, incorporating targeted adjustments and a "multiplier" to neutralise adverse capital effects.