I can not understand whether Basel III (in the part of market risk) applies both to Trading Book and Banking book or just to the first one.

I have read that for what concerns Banking book you only compute credit, change in commodity price and exchange rate. But I am not fully sure about this.

Could you synthesize in few lines the approaches to trading and banking book for what concerns Market risk and how to measure it?

  • $\begingroup$ Your question fills various book. As a first start you could do research on the difference between the banking book and the trading book and you would find things like this: erikjohansson.blogspot.com/2012/05/… $\endgroup$ – Richard Jun 18 '18 at 14:26
  • $\begingroup$ Thanks a lot for your reply. Actually, I know the difference between banking and trading book. The problem is that I cannot understand the specific point from a regulatory point of view having regard to Basel III: which risks are covered for the banking book? $\endgroup$ – Klapaucius Jun 19 '18 at 15:18

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