Basel III is a set of international standards developed by the Basel Committee on Banking Supervision (BCBS) who produced a framework of measures to strengthen the supervision and risk management of banks. Basel III will impact banks engaged in securities financing activity as in most instances they will now need to allocate more capital to support these activities. Specific impacts on the securities financing industry can vary depending on jurisdiction.
Following on from the publication of Prudential Banking Rules: Explanatory Note, which provided a high-level overview of the framework and its impact to the securities financing market, our latest discussion paper in the series entitled Prudential Banking Rules: Basel III Endgame & the Buy Side, explores the Basel III Endgame from the perspective of implementation and unintended consequences, focusing on the impacts for high-quality funds when transacting with banks and potential ways in which they can work with their sell side counterparts to address the upcoming challenges.
To access and download the paper click here.