Asian trade finance at risk from Basel III

Paul Harrald of Standard Chartered tells Asean Risk 2012 conference that Asian banks providing trade finance services will struggle to meet Basel III rules on leverage ratios

The Asian trade finance market is at risk as a result of Basel III proposals, says Paul Harrald, head of group portfolio risk at Standard Chartered in Singapore.

Trade finance provides importers and exporters with short-term funding through loans, letters of credit and guarantees, but the ability of banks to perform these tasks will be severely constrained due to certain elements of Basel III such as the leverage ratio.

Under the leverage ratio, banks are required to set aside capital equivalent