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Jan

20

CMBS Doesn’t Fare Well Under Basel’s New Trading Book Framework

By Tony Seruga

Navigating the complex world of commercial real estate is about to get even easier and smarter – look for the NEWGlobest.com coming in February!

WASHINGTON, DC—Last week the Basel Committee on Banking Supervision published its long-awaited rule change for the new capital requirements under its updated Fundamental Review of the Trading Book framework.

The rule has wide applicability across many assets, but of greatest concern for the commercial real estate industry has been its potential impact on secondary market-makers’ trading books, which could affect the CMBS market.

The good news: the requirements are not as onerous as JPMorgan Chase had reported they might be last year, which in some cases went as high as 419%.

The bad news: they still are pretty bad. Trading book capital could increase by 40% under the new rules based on Basel’s impact assessment…

CMBS Doesn’t Fare Well Under Basel’s New Trading Book Framework

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