Regulators to revise banks' trading book capital rules

LONDON, March 22 (Reuters) - Global banking regulators have proposed revisions to rules that determine the minimum amount of capital banks must set aside to cover risk from their trading in stocks, bonds, derivatives and currencies.

The Basel Committee, made up of banking regulations from the world’s main financial centres, said the aim is to tackle problems encountered in the original rules published in January 2016.

“The proposed revisions are designed to support smooth implementation of the standard,” the Basel Committee said in a statement.

The rules form part of Basel III agreed by the Group of 20 Economies in the aftermath of the 2007-09 financial crisis that left taxpayers bailing out undercapitalised banks.

“The proposed changes by the Basel Committee are welcome and show the value of the Basel monitoring process, as the requirements as they stood would have had a negative impact on banks’ trading book activities, and their ability to provide financing and hedging solutions to end users,” said Mark Gheerbrant, head of risk and capital at ISDA, a global derivatives industry body.

The revised rules come into effect in January 2022.

Reporting by Huw Jones, editing by Kirstin Ridley