Basel III market-risk standards still 'quite complex,' Basel's Coen acknowledges

6 February 2019 8:45pm
Basel III market-risk capital standards that were finalized last month partly to simplify the previous regime remain complicated and possibly in need of clarification, said William Coen, secretary general of the Basel Committee on Banking Supervision.

“One of my lasting, I wouldn’t call it regrets, but I’m quite aware of the fact that finalized market-risk rules continue to be quite complex,” he said in an industry interview posted on the Bank of International Settlements website. “I’m quite aware of the need for the Basel Committee to provide stability and certainty to the framework.”

The new principles seek to help banks absorb losses from the price movements of trading instruments. They aim to improve the risk sensitivity of Basel 2.5’s standardized approach of a decade ago, improve its simplicity and enable consistent implementation among jurisdictions.