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Basel Committee eases trade finance rules
25 October 2011
Basel Committee relaxes Basel II regulations for trade finance.
Read more:
Basel regulations
WTO
ICC
Basel II
trade finance capital requirements
liquidity
AIRB
credit risk
ICC-ADB
The Basel Committee on Banking Supervision has relaxed the Basel II regulatory capital adequacy framework for trade finance.
The committee has agreed to waive the one-year maturity floor for certain trade finance instruments under the advanced internal ratings-based approach (AIRB) for credit risk.
It has also agreed to waive the so-called sovereign floor for certain trade finance-related claims on banks using the standardised approach for credit risk.
Although no further detail has been given it is believed that the two waivers will impact off-balance sheet trade finance instruments, such as letters of credit.
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