Trade Finance Magazine Copying and distributing are prohibited without permission of the publisher

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.


Upcoming Events

Quote

We have the potential to be at the beginning of the segregation of trade finance as an asset class.

How Basel III rallied the trade finance industry - April 2014