The Short- and the Long-Term Ramifications of FRTB

In part one of this two-part video series, Jon Anderson, Editor, discusses the advantages of being early on FRTB with Bruno Castor, Head of Market Risk at Murex.

The solution to FRTB is not as simple as adding hardware, and with the right system in place early this may even not be necessary. The advantages of being an early adopter are clear. The first ones ready are in a stronger position as they will have a head start in assessing the business impact of the regulation and optimizing desk structures. There are also the unintended consequences of FRTB, introduced as a risk management tool, the regulation may also impact in strategic decisions around business objectives and expansion. FRTB is a key milestone in a long list of regulations banks need to implement that all trend towards increasing the cost of trading. To remain competitive banks need to be able to asses at pre-deal level the best counterpart and best route for trading.

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