In response to the PRA's confirmation of its final rules implementing Basel 3.1, Caroline Liesegang, Managing Director, Head of Capital and Risk Management at the Association for Financial Markets in Europe (AFME) said:
“AFME welcomes the clarity provided today by the PRA on the UK implementation of Basel 3.1, as well as the efforts to give firms sufficient time to prepare ahead of the rules coming into force.
“Delaying FRTB-IMA is a sensible and pragmatic decision, given the continued uncertainty around how and when the standards will be implemented internationally. But postponing only part of FRTB also creates significant operational complexities for firms, so it is important the regime works in practice for all banks and that the PRA applies flexibility during the transition process. We therefore welcome the PRA’s clarifications with respect to in-scope positions and model administration during the interim period.
“We encourage the PRA to use the additional time provided by delaying FRTB-IMA to further improve the framework to ensure global consistency and enable more banks to consider using internal models.”
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