The Global Financial Markets Association (GFMA), the Institute of International Finance (IIF) and ISDA have issued a statement on the Fundamental Review of the Trading Book (FRTB) framework issued by the Basel Committee. They highlight concern that, despite the Basel Committee’s reiteration that it would not significantly increase overall capital requirements, trading book capital will increase by 40% under the new rules based on the Committee’s impact assessment. They worry that the rules may have a negative effect on banks’ capital markets activities and reduce market liquidity and so suggest that further impact assessment needs to be run to assess whether the gap between the standard and internal models based capital outcomes is reasonable, considering future work on standardised floors. (Source: GFMA, IFF and ISDA Raise Concerns Over FRTB)