On July 2, 2021, ISDA and the Association for Financial Markets in Europe (AFME) submitted a response to the European Banking Authority (EBA) on its consultation on the draft regulatory technical standards on emerging market and advanced economies as part of the Fundamental Review of the Trading Book framework.
In order for institutions to be able to calculate their own funds requirements under the sensitivities-based method, Article 325ap(3) of the Capital Requirements Regulation requests the EBA to specify the economies that should attract lower risk weights for equity risk under the FRTB standardized approach (so-called advanced economies) with other economies subject to higher risk weights.
The industry supports an approach that takes into account economic evolution as well as development of markets instead of relying on the static Basel Committee on Banking Supervision list. The industry believes there are no simple econometric methodologies that can be applied in order to achieve a precise definition of an advanced market. We believe economic integration in Europe, both within the European Union and the European Economic Area, including advanced common investor protections and disclosure requirements, cross-border access and access to a wide range of financial services providers, have effectively resulted in a system that can be defined as an advanced economy.
Documents (1) for ISDA and AFME Respond to EBA on Emerging Markets and Advanced Economies under FRTB
Latest
ISDA Trading Forum Tokyo: CEO Remarks
ISDA Derivatives Trading Forum Tokyo October 17, 2025 Opening Remarks Scott O’Malia ISDA Chief Executive Officer Good afternoon, and welcome to the ISDA Derivatives Trading Forum. It’s great to be back in Tokyo, and I’d like to begin by...
Future of Asset Management in Japan: CEO Remarks
Future of Asset Management in Japan October 17, 2025 Welcoming Remarks Scott O’Malia ISDA Chief Executive Officer Good morning, and welcome to this ISDA event on the Future of Asset Management in Japan. We’re delighted to be holding this...
New Report on Japan's Asset Management Ambitions
ISDA and Crisil Coalition Greenwich shows that derivatives are expected to play a pivotal role in Japan’s ambition to become a global leader in asset management, but some barriers need to be reduced to enable the country’s asset managers to...
The Derivatives Market in Japan
A healthy derivatives market is an important element to Japan’s plan to become a global leader in asset management. Asset managers are eager to increase their use of derivatives to better take and manage risk, but note that there is...