ADAPTING TO THE NEW FINANCIAL LANDSCAPE MERCHANT TRADING

摘要

Despite well-publicised retrenchment in commodities finance by some European banks, merchant trading companies are still able to find sources of funding to expand their business lines. Philip Alexander reports. The potential impact of Basel Ⅲ on trade finance has been well documented. Trade letters of credit, as off-balance-sheet items, will be converted into credit items for the purpose of calculating the bank's capital requirements. The conversion rate will be 100%, so the bank will need to hold capital against the full value of trade finance, even though much of it is secured against commodities or transportation.