On 24 March 2025, the European Commission (Commission) launched a consultation on the application of the market risk prudential framework.
In 2024, the Commission postponed until 1 January 2026 the date of application of the Fundamental Review of the Trading Book (FRTB) so as to align implementation with other major global jurisdictions.
The consultation is focused on potential actions by the Commission through delegated acts and therefore is framed by the empowerment to the Commission under Article 461a Capital Requirements Regulation (CRR), which allows to delay the entry into application by up to two years, or to introduce changes to the standards for up to three years. The scope of the empowerment concerns only Part Three (capital requirements), Title IV (Own funds requirements for market risk) of the CRR – it does not cover for instance the boundary conditions or the output floor (set out in Part Three, Title I on General requirements, reporting and valuation).
The Commission is consulting around three potential options:
- Implementing the FRTB as currently laid down in the EU Banking package, from 1 January 2026.
- Postponing the date of application by a further year (1 January 2027).
- Introducing temporary and targeted amendments to the market risk framework for up to three years. The possible amendments are presented in more detail in the annex to the consultation.
Combinations of the above options or other alternatives could also be envisaged provided they are within the Commission’s mandate.
Next steps
The deadline for comments on the consultation is 22 April 2025.