The Bank for International Settlements’ (BIS) capital requirements for banks, also known as Basel III, impact on a wide variety of stakeholders. It's not only the banks that are keen to take note of the additions to the Basel II Accord, but their corporate clients also want to understand the implications. This article examines the various effects on corporates and their treasury departments, and also provides some suggestions on how to cope with the consequences of the Basel III capital adequacy regime.
As personal adviser to Wim Duisenberg, the first president of the European Central Bank (ECB), Dr. Lex Hoogduin played a key role in the introduction of the euro. He is professor of monetary economics and financial institutions at Robeco and since 1980 has worked in different roles at the Dutch Central Bank, including executive director to the governing board from 2009 till 2011. In this interview Dr. Hoogduin gives his views on the origins of the financial crisis, Basel III and the tension between micro- and macro-economics.
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.
Credit ratings are becoming more common in the public sector. A credit rating is a report on the financial health of a company or institution. However, directors and finance managers often regard the rating process as a bit of a mystery. As far as Zanders consultants Charles Zondag and Hendrik Pons are concerned, it is certainly worth getting to grips with the dynamics of credit ratings.
The details are still being hammered out on regulatory reforms but it is clear that the consequences for corporate treasuries will be substantial. However, regulatory changes provide a unique opportunity for treasurers to increase automation to facilitate compliance and improve internal processes.