The Basel Committee introduced its first standard for minimum capital requirements for market risk in 1996. In response to the significant trading book losses that banks incurred during the 2007–2009 financial crisis, the Committee adopted a series of amendments (called "Basel 2.5") between 2009 and 2010. Basel 2.5 is the framework currently in force in most Committee member jurisdictions.
The Basel 2.5 reforms only corrected the most pressing deficiencies of the 1996 market risk framework that were exposed during the crisis. However, a number of structural shortcomings remained to be addressed. Therefore, the Committee's fundamental review of the trading book (FRTB) aimed to develop a new, more robust framework. The new framework, released in 2016, presented stricter criteria for assigning instruments to the trading book or the banking book, reformed the internal models approach (for example by replacing value-at-risk with expected shortfall) and introduced a new, more risk-sensitive standardised approach. In 2019, the finalised version addressed outstanding design and calibration issues and provided restructured text. The finalised market risk framework is expected to be implemented on 1 January 2023.