In case of “Listed equity and bonds” category we understand that this category should include equity in listed companies and bonds that are listed on the stock exchange (issued by both listed and non-listed companies). Furthermore, we assume that the bank should take into consideration only those Listed equity and bonds that are held on the “banking book” i.e. those that are held long-term (all listed equity and listed bonds with repayment date >12 months) and can exclude Listed equity and bonds that are held on the “trading book” i.e. those that are held short-term, just for trading purposes. Please confirm if this understanding is correct.
Per the draft Near-Term Financial Sector SBT Guidance, the coverage requirement for listed equity and corporate bonds would apply to securities in both the trading book and banking book.
Under the current standard, does the coverage requirement for listed equity and corporate bonds apply in the same way, i.e. should securities in both the trading book and the banking book be covered?
Yes, it should be the same.