The European Banking Authority published a no-action letter and technical considerations to support consistent implementation of the revised Fundamental Review of the Trading Book framework. The measures will become relevant once the European Commission’s Delegated Act modifying market risk own funds requirements enters into force. The no-action letter recommends that competent authorities not prioritize supervisory or enforcement action concerning rules on the boundary between the banking and trading books, internal risk transfers and certain related reporting requirements. This is intended to prevent banks subject to the institution-specific multiplier from having to implement multiple versions of the boundary framework and to avoid different treatment of other institutions. The technical considerations address material implementation issues and clarify institutions’ treatment in the supervisory benchmarking exercise. The Delegated Act remains under scrutiny by the European Parliament and Council. Upon entry into force, it will modify the calculation of market risk own funds requirements for three years from Jan. 1, 2027.
European Banking Authority2026-08-03
European Banking Authority issues no-action letter and technical clarifications for EU market risk framework
The European Banking Authority issued a no-action letter and technical clarifications for implementing the revised EU market risk framework. It recommends that authorities not prioritize action on banking and trading book boundary rules, internal risk transfers and certain reporting requirements once the relevant Delegated Act enters into force. The act would modify market risk own funds calculations for three years from Jan. 1, 2027.