FEFSI Letter to EU Commission on Capital Adequacy

11 March 2004

In a letter to the European Commission on the Treatment of CIUs in the Trading Book and Banking Book FEFSI states that the proposed methodology to look through CIUs held in the trading book or banking book would impose unwarranted administrative burden on banks and investment firms. According to the Federation, the effect of this would be to distort the level playing field between CIUs and products such as asset-backed securities

Fefsi’s main concerns include, that:

it would be excessively demanding to request that banks follow on a daily basis the underlying investment and foreign exchange positions of a CIU;

the proposed treatment would penalize CIUs with wide mandates

Letter

© FEFSI