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Trade finance burdened by Basel II
23 November 2009
Basel II is weighing heavily on trade just when it needs all the help it can get. Alexander R. Malaket explores the impact of Basel II on the financing of international trade.
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Basel II and trade finance
the impact of Basel II on trade finance
trade finance restrictions
Trade finance specialists have been voicing serious concerns about the capital adequacy requirements imposed by Basel II on the business of trade finance noting that regulatory constraints have been detrimental to the conduct of international trade.
As the world begins to see signs of reversal in the global economic crisis, the finger-pointing has begun in some quarters. Private sector financial institutions have been vilified and the regulators charged with their oversight have been characterised as inept and incompetent.
The Basel II Accords have been described by some as an utter failure, and in particular have been accused of unbalanced and detrimental treatment of certain lines of business – particularly trade finance.
Jean-Paul Riolacci, global head of GTS at BNP Paribas (BNPP) in Paris comments: “In our view, Basel II was targeting regulation and compliance related to products of a financial nature – not so much those like trade finance that are...
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