Trading book

Bank supervision - capital adequacy.

For capital adequacy calculation purposes, a bank's trading book includes any instruments which are held for any one or more of:

• Short term resale.
• Profiting from short term price movements.
• Locking in arbitrage profits.
• Hedging risks arising from any of these activities.

The trading book is distinguished from the banking book.

The banking book includes all instruments which are not in the trading book.

See also

• Arbitrage
• Banking book
• Capital adequacy
• Fundamental Review of the Trading Book
• Hedging
• Interest rate risk
• IRRBB
• Market risk
• MCRMR
• Market Risk in the Banking Book (MRBB)