Securitisation and Regulation News

Basel Committee on Banking Supervision (BCBS) – BCBS Evaluates Treatment of Trade Finance under Basel Framework

The Basel Committee on Banking Supervision (BCBS) issued a report that evaluates the impact of Basel II and Basel III on trade finance in the context of low- income countries. As a result of this evaluation, the Committee has adopted two changes to the treatment of trade finance in the Basel II and III capital adequacy framework: waive the one-year maturity floor for certain trade finance instruments under the advanced internal ratings-based approach (AIRB) for credit risk; and waive the so-called sovereign floor for certain trade-finance related claims on banks using the standardised approach for credit risk.

BCBS report