What is frtb

The Fundamental Review of the Trading Book (FRTB) is a comprehensive suite of capital rules developed by the Basel Committee on Banking Supervision (BCBS) as part of Basel III, intended to be applied to banks' wholesale trading activities. The FRTB aims to address a number of identified shortcomings in the existing Basel II.5 framework. Originally, the revised framework was scheduled to be implemented as final rules under domestic legislation on 1 January 2019, with regulatory reporting under the framework becoming a requirement from 31 December 2019. However, on 7 December 2017, the Basel's Committee oversight body, Group of Central Bank Governors and Heads of Supervision (GHOS), announced a delay in its implementation until 2022.In the EU, FRTB is being implemented as part of the Revised Capital Requirements Regulation (CRR II), published in November 2016, and the 2021 proposed Banking Package (including CRR III and CRD VI). While FRTB was not intended to increase banks' capital costs beyond those imposed by Basel II.5, it is clear from both BCBS and industry analysis that banks will see significant increases in their cost of capital, in particular to support their trading activities.Given the potential impacts for secondary bond market efficiency and liquidity, the final calibration and implementation of FRTB are key priorities of ICMA's Secondary Market Practices Committee (SMPC).