Treatment of Trade Finance under the Basel Capital Framework

Following consultations with the World Bank, the World Trade Organisation and the International Chamber of Commerce, the Basel Committee on Banking Supervision has evaluated the impact of Basel II and III on trade finance in the context of low income countries. As a result of this evaluation, the Committee has adopted two changes to the treatment of trade finance in the Basel II and III capital adequacy framework. These changes respect the integrity of the capital framework and its broader financial stability objectives.