Trading book boundary enforcement paused until 2029
De Nederlandsche Bank has extended its non-enforcement period for market risk boundary provisions between the banking book and trading book until December 31, 2029. The decision aligns with recent recommendations from the European Banking Authority to reduce operational complexity.
Reprieve for market risk framework
De Nederlandsche Bank (DNB) will not prioritize supervisory or enforcement actions regarding the boundary between the banking book and trading book for directly supervised credit institutions until December 31, 2029.
This policy shift follows a statement issued by the European Banking Authority (EBA) on August 3, 2026, which addressed the implementation of the revised market risk framework.
The underlying regulatory updates stem from the European Commission's third Delegated Act adopted on June 4, 2026.
These temporary operational adjustments respond directly to concerns that the current rules generate severe operational complexity and legal uncertainty for financial institutions across the European Union.
Preparations must continue regardless
The Fundamental Review of the Trading Book (FRTB) establishes strict boundaries to prevent regulatory arbitrage between trading activities and traditional banking assets.
While the EBA advised competent authorities to pause enforcement of these provisions and related reporting requirements, DNB stressed that banks must not halt their implementation efforts.
Supervised institutions are expected to continue preparing for the full rollout of the revised market risk rules, ensuring internal systems and compliance procedures will be fully functional once the forbearance period expires.
Pragmatism over premature enforcement
The enforcement freeze offers vital breathing room, yet it exposes persistent flaws in rolling out complex market risk rules.
Pausing supervision risks fostering complacency among banks lagging in preparation.
Regulators must fix these operational issues permanently rather than merely kicking the deadline down the road.