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Credit derivatives terminology
By
Vinod Kothari
Banking Book: See also Trading Book. For computation of required Regulatory Capital, post-1997, banks are required to allocate assets between banking book and the trading book. Banking book refers to the general banking activities of a bank, not including securities or derivatives held purely with an intent to short-term profit-taking. The regulatory capital requirements for the banking book are based on credit risk, while those on the trading book are based on market risk.
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