Newsletter Oct 2007: Regulators seek mini-QIS on new trading book rules

LONDON – Regulators intend to ask major banks to undertake what some have dubbed a min-QIS – or quantitative impact study – to test the affect of proposed new rules on their trading books. The regulatory treatment of certain residual risks in banks’ trading books is one of the last outstanding issues left over from the negotiations that produced the new Basel capital framework (Basel II). That framework is starting to be adopted by banks in Europe and elsewhere – but not in the US – this year.