Treasury risk reigned in at CBA

Commonwealth Bank may be lowering risk limits across its treasury trading book. The Financial Review reports on a series of reviews in recent months by CBA of its treasury operations by the Australian Prudential Regulation Authority, PricewaterhouseCoopers and First Manhattan Consulting Group.

One change is that CBA has curtailed risk limits for many traders, with many more decisions escalated higher up management ranks than before.

The reviews may raise questions about the strategy, and earnings risk, CBA is willing to tolerate in its trading book.

The AFR's opening to a discussion of these issues is the changed role, and reported absence from the markets, of Vincent Hua, the bank's head of product and trading.

CBA told the newspaper Hua was "undertaking a higher", that is, management role. Anonymous sources told the AFR that Hua was on a "trading strike".