CFO: Basel III Rules Could Curb Corporate Credit
CFO said that rules on liquidity levels set by the Basel III framework for bank capital could curtail banks’ appetite for underwriting lines of credit for companies, citing a report from CreditSights.
CFO reported that CreditSights assembled a panel of executives from the International Association of Credit Portfolio Managers, Mizuho Securities and Barclays Capital, which stated the liquidity coverage ratio (LCR), a part of Basel III, “changes the way banks think about uncommitted credit lines,” including undrawn term loans, working capital facilities and commercial-paper backstops.
CFO cited the panelists as saying the focus for banks will go “from one of managing credit costs to managing significantly increased liquidity costs” for lines of credit.
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