Activities Round Up

Date : 20 Jul to 20 Jul 2016
Place : London
Organised by : FISME

FISME raises issue of impact of Basel norms on trade finance at UNCTAD-XIV, Kenya


As a concurrent event on Trade Finance organized by Commonwealth Secretariat (London) during UNCTAD IX in Kenya, FISME raised the issue of impact of Basel norms on MSME lending.  Representing FISME, Mr. Anil Bhardwaj, Secretary General highlighted that after BASEL II SME lending has been showing negative trend across the countries and that after Basel-III it was the turn of trade finance to take a hit.   Under Basel III, banks will be required to hold the leverage ratio of Tier 1 capital over total assets and off-balance sheet exposures equal to 3%. It means that off-balance-sheet trade finance (i.e. letters of credits, standby letters of credits and letters of indemnity), along with other off-balance-sheet items, will have to be incorporated into the calculations of the leverage ratio, and thus are assigned a 100% credit conversion factor.