The Parliamentary Commission on Banking Standards (PCBS) has published a report looking at the risks proprietary trading by banks presents. It finds the risks are significant and that banks agree. However, it says the US experience shows how difficult it is to define proprietary trading and legislate against it. So the PCBS recommends the Prudential Regulation Authority (PRA) uses its regulatory toolkit to address these risks. It suggests capital add-ons or variations of permission, and that banks should agree a regular statement of risk exposures in their trading book with PRA. It says the Banking Reform Bill may need amendment to give PRA the necessary powers. It expects PRA to report on implementation of the recommendations and that there should be a further independent review of the case for further action (Source: Banking Standards Commission Proprietary Trading Report)