How Basel III is turning borders into barriers

Increasing prices on cross-currency swaps as a result of Basel III’s credit valuation adjustment charge are making it harder for companies to issue bonds overseas – this is just one example of the fragmentation of global capital markets

Globalisation has produced some powerful icons: the golden arches of McDonalds glowing in more than 100 countries, the Asian and European car plants clustered in Mexico and the southern states of the US, and the US-invented iPhone assembled in China from components made in a host of other countries. But underpinning these developments is a less visible force – the global capital markets that give companies the ability to issue foreign currency bonds and swap the proceeds back into domestic