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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