Trading book

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Trading book ( English trading book ) is in Banking of the bank regulatory term for all risk positions , by a credit institution are held for the purpose of short-term resale to exploit price and / or interest rate fluctuations. The banking book is a complementary term .

This term from the banking sector must not be confused with the obligation to keep trading books within the meaning of Section 239 HGB. These are records from which the commercial transactions and the financial position of a businessman can be seen in accordance with the principles of proper accounting .


When banks conduct banking business, they have to decide how long they want to keep acquired banking business in their portfolio (i.e. in the bank balance sheet ). This intention is achieved through short, medium or long term inventory. If you only want to keep financial transactions in stock for a short time, it is usually based on a speculative trade. This must be answered in the negative when granting a long-term investment loan to a bank customer. In order to systematize these different business motives, previously § 1a KWG a. F. the banks differentiate between trading and banking books. According to this, the only short-term transactions with the intention of a trading profit had to be reported in the trading book. All other financial transactions were to be transferred to the banking book.


The earlier in § 1a KWG a. F. on the regulatory differentiation between trading book and banking book were essentially adopted in European law. Since January 2014, Section 1a KWG has stipulated that the Capital Adequacy Ordinance (CRR) and the Equity Directive (CRD) apply. Credit institutions that are obliged to keep a trading book are referred to as trading book institutions .

The legal definition of the trading book results from Art. 4 Paragraph 1 No. 86 CRR, according to which a trading book is to be understood as all positions in financial instruments and goods "that an institution holds either with the intention of trading or to hedge other positions in the trading book held with the intention of trading" . Art. 4 Para. 1 No. 85 CRR irrefutably assumes the following items are intended to trade:

  • Positions from proprietary trading and from customer service and market maintenance,
  • positions held for short-term resale and
  • Positions where the intention is to generate profits from existing or expected short-term price differences between buying and selling prices or from other price or interest rate fluctuations .

Trading book positions (previously: trading book risk position) are all interest-rate and share price-related financial instruments in the trading book of a trading book institution (Section 4 (6) SolvV old version). They contain market price risks in the form of interest rate and (share) price risks that are used in proprietary trading. According to Art. 92 (3b) CRR, the trading book position is part of the total exposure amount. The subject of proprietary trading can be all types of financial instruments such as securities ( shares , bonds , warrants and participation certificates ), money market instruments , currencies , sorts , precious metals , loans or derivatives that are acquired with the intention of trading. In accordance with IAS 39.9, trading is understood to be the intention to sell or buy back an acquired or entered into financial instrument in the short term - with the aim of short-term profit-taking . Equivalent to a short-term resale is the partial or complete closing of the market risk position by a hedging transaction ( closing ). Positions for which there is a market are tradable . "The tradability of the instruments ... is important in order to prevent the inclusion of transactions in the trading book that cannot be turned over on the market and thus - with relatively low credit and backing rates compared to the banking book - can lead to a concentration of risk at the underlying institution ". Receivables are tradable; a functioning secondary market has been established for other loans ( loan trade ). Another distinction is to be made between the banking supervisory term trading business according to the minimum requirements for risk management . If a bank conducts proprietary trading or market maintenance, the allocation of the corresponding financial transactions to the trading book is mandatory. While proprietary trading does not include customer-oriented transactions, market maintenance can consist, for example, in price maintenance for participation certificates recognized as supplementary capital, but must then be limited to only 3% of the issue amount. Proprietary trading serves to generate income “by taking advantage of short-term price and exchange rate fluctuations”. The trading book also includes repurchase and loan transactions on positions in the trading book, as well as transactions that are comparable to repurchase and loan transactions on positions in the trading book. These include in particular:

  1. Financial instruments , tradable receivables and shares that the institution holds in its own portfolio for the purpose of reselling or that are taken over by the institution in order to make short-term use of existing or expected differences between purchase and sale prices or price and interest rate fluctuations in order to achieve profit from proprietary trading;
  2. Holdings and transactions to hedge against market risks in the trading book and related refinancing transactions ;
  3. out Abandoned business (according to the "right of self-entry", see) acquired pass-through positions;
  4. Claims in the form of fees , commissions , interest , dividends and margins that are directly linked to the positions in the trading book.

The banking book includes trading transactions that are concluded for the purpose of benchmarking (treasury) and securities purchases for the liquidity reserve, even if they are held for a short time.

The requirements for the trading book are regulated in Art. 102 ff. CRR. The positions held therein must be marketable or can be hedged . Marketability requires a functioning, especially liquid market, on which the financial products can be traded and meet demand. The other regulations also deal with organizational details. There must be strategies, written rules and procedures for the trading book (Art. 102 (2) CRR) and controls in place. Any intention to trade must be in line with the bank's trading strategy (Art. 102 (2) in conjunction with Art. 103 CRR). Control rules (103b CRR) set requirements for the active control of trading book risks. A cautious valuation according to Art. 105 CRR is guaranteed in particular by the strict lowest value principle ; it must be valued daily (Art. 105 Para. 3 CRR).


Short-term terms - relevant for the trading book - apply in accordance with Section 9 (2 ) of the Financial Institutions Accounting Ordinance (RechKredV) to remaining terms of up to 1 year; beyond that, they are medium-term (up to five years) or long-term (more than five years). If short-term transactions are customer transactions, allocation to the banking book is provided, otherwise those transactions must be allocated to the trading book. In the case of medium to long-term holdings, an allocation to the banking book is generally possible. In § 35 , para. 1, no. 1a RechKredV the obligation of the banks is provided in the Annex to make a breakdown of the components of the balance sheet item "trading portfolio". The lists in Section 35 (1) No. 6a to 6c RechKredV serve to make the valuation of the trading portfolio at fair value more transparent. Number 6a RechKredV obliges to specify the essential parameters for calculating the risk discount and the absolute amount of the risk discount. Number 6b is used to explain reclassifications made during the financial year . According to IAS 39.45, all banking transactions are to be given an IFRS category , which clarifies this holding intention. The category Held for Trading (HfT) comes into consideration for trading intentions.

Trading and banking book

The trading book and the banking book must be clearly identifiable at all times and must therefore be kept separate from one another. It is thus important in accounting marking or at least all times discoverability of balance sheet and off-balance sheet trading book positions to be ensured.

According to commercial law, reclassifications of the investment portfolio to the trading portfolio according to Section 340e Paragraph 3 Clause 2 HGB are not permitted; conversely, according to Clause 3 of this provision, they are only permitted "if exceptional circumstances, in particular serious impairment of the tradability of the financial instruments, lead to the abandonment of the trading intention by the Run a credit institution ". This includes fundamental market disruptions such as during the financial crisis from 2007 .

According to banking law, reallocations were in Section 1a (4) KWG a. F. regulated. Reclassifications are the transfer of positions originally shown in the trading book to the banking book or vice versa, which is only permitted in exceptional cases. Depending on its earnings position , it can be tax-advantageous for a bank to allocate risk positions either to the trading book or the banking book in order to realize tax-free profits or allowable losses . A reallocation must be carried out under banking law if the prerequisites for attributing the corresponding item to the trading book or banking book no longer apply. Otherwise, positions in the trading book may only be reallocated to the banking book or vice versa if there is a conclusive reason for the reallocation. This is intended to prevent banks from using arbitrary reallocations to their advantage. In the case of transactions with third parties that are triggered by a customer's order ( customer transactions ), in which the service aspect is in the foreground and which are therefore included in the banking book, the transactions in question must be reclassified to the trading book if they have not been traded on at the latest by the close of business ( Closing out ). If the market risk position created in this way is partially or fully closed by a hedging transaction, this is treated as a resale under banking supervisory law and assessed as a closing out. The service character of customer transactions is generally called into question when speculative purposes are at least pursued. Reclassifications are to be explained in the appendix in accordance with Section 35 (1) No. 6b RechKredV .

Customer transactions in the trading book

In the case of transactions with third parties that are triggered by a customer's order (customer transactions), in which the service aspect is in the foreground and which should therefore be added to the banking book, the relevant transactions are to be reclassified to the trading book if they are not traded on at the latest by the close of business have been. The service character of customer transactions is in principle called into question under banking supervisory law if speculative purposes are at least also pursued; in any case, an assignment to the banking book is out of the question.

To focus on the close of business is problematic. In the time between the conclusion of the customer transaction and the close of business, risks can develop for the institute that assume an objectively speculative character. According to the wording and purpose of the law, BaFin could just as well argue that the position should be continued immediately ( i.e. only with technical delays) if the assignment of customer business to the trading book is to be avoided. The existing relief can only be defended with the stipulation that the BaFin, for certain business structures - which formally fall under the relief -, in accordance with the purpose of the statutory regulation, require assignment to the trading book, which is assigned to the trading book. For the positions established within the framework of the issuing business ( Section 1 Paragraph 1 Sentence 2 No. 10 KWG), allocation to the trading book is mandatory if the institution does not want to include the securities in the investment portfolio but rather hold them for short-term resale.

Web links

Individual evidence

  1. Short-term trading book transactions with a holding period of less than 3 months are considered
  2. Knut Henkel, A company-type-specific synopsis of accounting differences between financial instruments according to IFRS and HGB , 2011, p. 63
  3. BaKred circular 17/99 of December 8, 1999, p. 9
  4. BaKred circular 17/99 of December 8, 1999, p. 4
  5. Hermann Schulte-Mattler / Uwe Traber, Market Risk and Equity: Counterparty Default and Price Risks , 1997, p. 26
  6. ^ Deutsche Bundesbank, Monthly Report January 1998 , p. 65
  7. ↑ Right of self-entry . In: Meyers Großes Konversations-Lexikon . 6th edition. Volume 18, Bibliographisches Institut, Leipzig / Vienna 1909, p.  314 .
  8. Jörg Gogarn, MaRisk Handbook , 2015, BTR 2.1 Item 4
  9. Gerrit Adrian, Corporate Tax Law , 2010, p. 854
  10. BaKred circular 17/1999 of December 8, 1999, allocation of the holdings and transactions of the institutes to the trading book and the banking book , p. 9
  11. BaKred circular, allocation of the holdings and transactions of the institutions to the trading book and the banking book , p. 9
  12. Bundestag printed matter 16/12407 of March 24, 2009, draft of the Accounting Law Modernization Act - BilMoG , p. 92
  13. BaKred circular, allocation of the holdings and transactions of the institutions to the trading book and the banking book , p. 9
  14. BaKred circular, allocation of the holdings and transactions of the institutions to the trading book and the banking book , p. 9