The U.K. Financial Services Authority (FSA) will apply banking book risk weights to securitization trading positions following the position adopted under the capital requirements directive (CRD 3) passed by the European Parliament at the end of July.

In a 126-page discussion paper looking at different approaches to tightening up the rules, the FSA looked to make a fundamental change that would end the distinction between trading and bank books. The FSA recommendation would tighten up how banks price trading positions.

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