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BAFT submits letter to Basel Committee on Banking Supervision outlining price and capital impacts of Basel III proposals

by Patrick Devilbiss | Nov 21, 2016
BAFT submitted a letter to the Basel Committee on Banking Supervision reiterating its belief that, if left unchanged, the Basel III proposals outstanding would be highly detrimental to trade finance. Read the Letter

On November 17, 2016, BAFT submitted a letter to the Basel Committee on Banking Supervision reiterating its belief that, if left unchanged, the Basel III proposals outstanding would be highly detrimental to trade finance.  BAFT highlighted recent work from Oliver Wyman which shows that lending will decrease 2.6% with every 1% increase in capital ratios.  Further, modeling shows that, for trade finance, capital requirements will increase by around 36%, and pricing will need to increase an estimated 60%-100% depending on the product.  As the Basel Committee wraps up its work related to the Basel III package of reforms, BAFT urges the Committee to modify the proposals to avoid these potentially calamitous effects.

Read the Letter