Many banks are requesting the EU to delay the implementation of new trading book regulations and are calling for them to follow the pace set by the US and the UK.

A recent survey shows that the majority of banks hope that the European Union will once again delay the implementation of a new set of rules called the Fundamental Review of the Trading Book (FRTB), sparking concerns about whether the EU should follow the US and UK in postponing related reforms. The International Financial Association and the International Swaps and Derivatives Association recently responded to an EU consultation document, stating that a "clear majority" of the participants support another one-year delay in the implementation of the FRTB rules. The two organizations jointly surveyed 32 global banks, with 21 of them in favor of another delay. The FRTB rules are part of the Basel Endgame, aiming to strengthen the financial system's risk measurement and capital regulation for trading activities. The EU originally planned to implement these rules by 2022, but due to the US not finalizing its own version of capital rules, the EU is concerned that regional banks may be at a disadvantage in global competition and has already postponed the implementation to 2026. However, many EU banks feel that the current delay is still not enough to alleviate the compliance pressure, and are requesting another extension. This issue has also caused divisions within Europe: large banks generally support the delay, while some small and medium-sized banks are concerned that postponing the implementation will increase their compliance costs. In their documents, IIF and ISDA pointed out that only "a few respondents" support maintaining the current implementation schedule, citing the reason of "avoiding ongoing operational complexity". Previously, it was reported that only four to five large banks were leading the push for a delay, including BNP Paribas, Deutsche Bank, and Intesa Sanpaolo. The European Banking Federation (EBF) also suggested in another opinion submitted to the EU that reforms should be made to the FRTB rules to reduce their impact on bank capital requirements, and proposed whether some banks could implement them in 2026, while others could postpone to 2027. However, the EU Commission has explicitly opposed this proposal of "phased implementation". Jean-Laurent Bonnaf, CEO of BNP Paribas, discussed the FRTB issue during this week's earnings call, stating: "It appears that the implementation of FRTB will likely take a more neutral approach than currently. Perhaps it will start with another delay, and then adjust the implementation path." In fact, FRTB was originally scheduled to be fully implemented in 2022, but due to the varying paces of major economies, the overall Basel Endgame reform process has been repeatedly delayed. Earlier this year, the EU introduced most of the elements of this plan, except for the trading book part, waiting for clarity in US policy. In contrast, the UK has announced three delays to the entire reform package, while the US has yet to determine a final schedule, mainly because regulatory teams are still in transition. Countries like Switzerland, Canada, and Japan have already fully implemented the Basel final package. Currently, the EU faces dual pressure of seeking a balance between global rule coordination and competitiveness of its domestic banking industry. Whether the EU chooses to postpone the implementation of FRTB again in the future will be a key point of interest in the financial markets.