Basel III Implementation and SME Financing PDF Download

Author: Boris Fišera
Publisher:
ISBN:
Category :
Languages : en
Pages :

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Author: Rym Ayadi
Publisher: Centre for European Policy Studies
ISBN:
Category : Business & Economics
Languages : en
Pages : 124

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Book Description
The First Basel Capital Accord, implemented in 1988, was aimed at ensuring the soundness and stability of the international banking system. The new accord, Basel II, which is planned for implementation in December 2006, is intended to strengthen the framework for dealing with credit risk. This book provides an informative analysis of what Basel II means for the small and medium-sized enterprize (SME) sector in Europe and its impact on its credit financing conditions. It also presents a detailed analysis of how banks formulate an internal rating system and illustrates how this system works in practice. Finally, it concludes with the key measures that should be taken by banks, SMEs, and public policymakers to improve financing in the new rating culture.

Author: Daniel Hosp
Publisher: GRIN Verlag
ISBN: 3656367426
Category : Business & Economics
Languages : en
Pages : 27

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Seminar paper from the year 2012 in the subject Business economics - Investment and Finance, grade: 1, University of Innsbruck, course: Aktuelle Themen in Banking and Finance, language: English, abstract: Basel III is currently on everyone’s lips. Some weeks before the introduction of the first requirements it is still not fully clear how and which parts of it will be implemented. Several studies about the impact of Basel III on bank loan availability for small and medium sized companies (SMEs ) do exist (e.g. McKinsey (2010)) which have shown that the introduction of those new regulatory requirements hamper the access for SMEs to sufficient sources of funding. This raises the question if these restrictions for bank lending can be substituted by some alternative funding source or if the availability of external finance to SMEs will be constrained under Basel III. This seminar paper focuses on the lending alternatives apart from bank loans and the possibility of gathering additional equity capital. This is basically the so called asset based finance. Thereby the paper concentrates on European SMEs as long as their conditions are quite similar to those of Austrian SMEs and the introduction of Basel III can be expected to be most strict for European financial institution and thus may hit those SMEs the most. Before starting with the explanation of different lending alternatives the importance of SMEs for the global economy should be pointed out. The importance is especially present in Europe. SMEs account for two third of the total employment in the EU-27 area and they generated more economic growth from 2002 to 2008 than large firms did (Oxford Economics, 2011). Moreover they represent 99% of all businesses that exist in Europe (European Commission, 2005). So SMEs are the main driver of economic growth, employment and wealth in Europe. Apart from that each single SME does not have a systematic risk and they were also not responsible for the current financial crisis. Thus SMEs should generally be supported to sustain growth and employment. Nevertheless the rules of Basel III may have highly negative influences on their financing possibilities which moreover has a negative effect on the real economy...

Author: Apolline Charpentier
Publisher:
ISBN:
Category :
Languages : en
Pages : 74

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The implementation of Basel II reforms has been designed to protect the international financial system from major bank collapses through the enforcement of minimum capital adequacy ratios. This new set of rules has raised concerns of triggering changes in institutions' business models leading to credit contraction, which in turn could potentially contribute to slower global economic development. Small and Middle Enterprises, which have traditionally been engines of growth, innovation, and R&D in Europe, are highly reliant on bank loans as opposed to equity funding. This thesis focuses on the specific impact of Basel II reforms on SME access to financing. The paper is structured around four sections. Part I provides a technical summary of the regulation, focusing on the specific capital requirements for SMEs. Part II reviews today's literature on the topic. Finally, parts III and IV respectively provide a theoretical and empirical examination of the consequences of the reforms on SME financing. Based on these analyses, this thesis supports the conclusion that Basel II reforms have not been the cause of a contraction in SME lending.

Author:
Publisher: Lulu.com
ISBN: 9291316695
Category : Bank capital
Languages : en
Pages : 294

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Author: Asmus Angelkort
Publisher:
ISBN: 9783868729214
Category :
Languages : en
Pages : 23

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Author: Miryusup Abdullaev
Publisher: GRIN Verlag
ISBN: 3656590613
Category : Business & Economics
Languages : en
Pages : 107

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Master's Thesis from the year 2013 in the subject Economics - Finance, grade: 1, University of Applied Sciences Coburg, language: English, abstract: Management Summary In response to the recent financial and ensuing economic crisis of 2007-2008, the Basel Committee on Banking Supervision announced a new set of measures – Basel III, which ought to create a more resilient banking system. It also intends to help contain adverse effects of financial system from spilling over to real economy. This, in turn, will allow real sector of economy avoid potential credit disruptions in future. However, just as a coin has two different sides, Basel III might also have unintended adverse effects on real sector. Therefore, this research is addressed at analyzing possible effects of the new regulations on corporate financing. Through review of relevant literature, we have been able to identify the most significant researches in the area to date. On one hand, advocates of Basel III argue for a substantial net economic advantage of around 2.6 per cent of annual GDP increase as a result of implementation and imply that society will be better off as a result. On the other hand, there are a number of critics, who state that prescribed tighter and liquidity requirements will create a two-side pressure on RoE of banks, prompting these to allocate less capital to lending business – thus decreasing credit, available to real economy. As a result, after conducting two case-studies: one a bank and another on a non-financial corporate, it has been determined that, on one hand, larger banks, using market leadership position, relatively bigger size and also given efforts, directed at reduction of operational costs will be able to limit price increase of most of commercial banking products. On the other hand, it is defined that this is the right time for non-financial corporates for a wider direct financial market participation. In general, this paper extends support for the new banking regulations given a proper implementation. As a closing point, a recommendation on how to best perform this strategic shift from traditional banking products to financial market products was proposed. Keywords: Basel III, corporate finance, strategy tools

Author: Philipp Marek
Publisher:
ISBN: 9783957299147
Category :
Languages : en
Pages : 0

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Book Description
This paper examines how Basel III capital reforms affected bank lending in Ger- many. We focus on the increase of minimum risk-based capital requirements and the introduction of the leverage ratio. The announcement of stricter risk-based capital regulation significantly affected low capitalized banks. The impact depends on a bank's credit risk model, i.e. whether a bank applies the standardized approach (SA) or an internal ratings-based approach (IRBA) to determine risk weights. Low capitalized SA banks significantly cut lending whereas IRBA banks did not ad- just lending volumes. By contrast, low capitalized IRBA banks significantly in- creased collateralization while low capitalized SA banks adjusted collateralization only marginally. Moreover, the impact on SMEs and large companies also differs. In terms of lending, SMEs were affected more strongly, whilst in terms of collateralization the impact on large companies was bigger. The announcement of the leverage ratio had, however, a rather limited impact. We find some evidence that low capitalized banks reduced lending. Furthermore, low capitalized banks somewhat tightened collateral requirements, especially for large companies.

Author: Rym Ayadi
Publisher: CEPS
ISBN: 9789290794905
Category : Bank capital
Languages : en
Pages : 108

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Book Description
The purpose of this report is to provide a detailed, up-to-date and critical analysis of the New Basel Capital Accord framework. It focuses on the limitations and pitfalls that may deserve further investigation, particularly at the European level. Moreover, it provides a provisional assessment of its effects on small- and medium-sized European banks, as well as small- and medium-sized European enterprises. It examines the procyclicality of the new Accord and offers mechanisms to counter it. Finally, it addresses the challenges of implementing the new rules at the EU level.

Author: Caio Ferreira
Publisher: International Monetary Fund
ISBN: 1498320309
Category : Business & Economics
Languages : en
Pages : 42

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Book Description
Developing economies can strengthen their financial systems by implementing the main elements of global regulatory reform. But to build an effective prudential framework, they may need to adapt international standards taking into account the sophistication and size of their financial institutions, the relevance of different financial operations in their market, the granularity of information available and the capacity of their supervisors. Under a proportionate application of the Basel standards, smaller institutions with less complex business models would be subject to a simpler regulatory framework that enhances the resilience of the financial sector without generating disproportionate compliance costs. This paper provides guidance on how non-Basel Committee member countries could incorporate banks’ capital and liquidity standards into their framework. It builds on the experience gained by the authors in the course of their work in providing technical assistance on—and assessing compliance with—international standards in banking supervision.