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.