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Article
UK banks face mounting pressure from FRTB uncertainty
As global divergence on FRTB and Basel 3.1 grows, UK banks face mounting uncertainty, rising costs, and strategic pressure in navigating reform.
Sep 23, 2025
Tags:
Operational and Non Financial Risk
The views and opinions expressed in this content are those of the thought leader as an individual and are not attributed to CeFPro or any other organization
- UK caught between EU decisiveness on FRTB and US regulatory retreat creating uncertainty
- Divergence in frameworks delays PRA action and complicates bank planning
- Few banks adopt Internal Models Approach due to high costs low capital benefit and heavy operational burden
- Preference for Standardised Approach risks systemic model risk and market herding
- Diminished role of modelling challenges retention and motivation of quantitative talent
- Dual reporting regimes add complexity and confuse strategic decision making
- Supervisory focus shifting toward counterparty risk and shadow banking resilience
- Failures like SVB highlight asset liability management weaknesses and regulatory blind spots
- Potential adjustments to NMRF charges and PnL attribution may not drive IMA uptake
- Risk of trading migration from UK if competitiveness declines
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