The effects of the credit crisis on corporate funding options have often been discussed. The general message is that it has become much more difficult for companies to attract bank financing since the start of the crisis in 2008. This is mainly due to worldwide deleveraging by banks, fueled by new regulations such as Basel III. However, these developments have also created an interesting opportunity for European investment grade corporates.
While Basel III may restore the health of the financial markets and the banking industry in the long run, it will also have an impact on the real economy and business in the mean time. The economic impact of Basel III is often mentioned, but seldom analyzed in detail. This article assesses the potential impact of Basel III on companies and outlines some options that corporate treasurers and bankers can explore in order to minimize the effects.