Earlier this year, the ICC Banking Commission, through its Trade Register Working Group, was invited to respond to proposals published by the Basel Committee on Banking Supervision (BCBS) entitled 'Revisions to the standardised approach (RSA) for credit risk and capital floors: The design of a framework based on standardised approaches.' In a letter sent to the BCBS on 23 March 2015 the ICC, speaking on behalf of the trade finance industry, expressed its support for the recalibration of the existing framework. The Banking Commission's submission, which has recently been released by the ICC, addresses numerous substantive issues. Specific recommendations include requests for the BCBS to consider:
Differentiated treatment for claims on banks less than 90 days old and rolled over.
CCF for commitments be revised to 20% or 50% based on exposure/product, in lieu of 75%.
The application of 0% CCF for certain types of trade finance commitments.
Recalibration of CCF from 50% to 20% for certain types of trade-related guarantee exposures.
A redrafting of clause 53 aimed at ensuring consistency in the application of CCF to Letters of Credit.
A copy of the submission can be viewed here ICC Letter to BCBS Revisions to the Standardised Approach to credit risk.pdf