Tailoring the New Basel Regime: Many are already concerned that Basel III will hurt global trade finance, but will regulators listen?

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Tailoring the New Basel Regime: Many are already concerned that Basel III will hurt global trade finance, but will regulators listen? Powered By Docstoc
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Description: Last September, the Basel Committee on Banking Supervision (BCBS) agreed on a new framework for global capital standards for the world's banks. The latest reform package from the BCBS is known as Basel III. The ultimate goal is to create a banking sector that can withstand the shocks of another downturn. In addition to increased minimum capital requirements, which, for common equity, bump up from 2% to 4.5%, Basel III also requires banks to maintain a 2.5% buffer above the minimum, bringing the effective total minimum capital requirement to 7%. Many banks argue that the regime is a bit too stringent, and some have predicted that there will be a $100 billion gap between the capital banks have now and the capital they'll need to be in compliance with Basel III when the time comes. While this shortfall could broadly affect the banking industry's willingness to lend in general, another aspect of Basel III that could affect trade finance lending capacity is its leverage requirements.
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