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ICC Banking Commission submission on BCBS revisions to the standardised approach to credit risk

29/07/2015

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


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LC required field 44E: Any port in Thailand Field 44F: Any port in Vietnam Bill of lading presented with the bellowing details: Pre-carriage by and Place of Receipt ITAL BONUS V.0474-113S SAHATHAI, THAILAND Vessel and Voy No. and Port of Loading EVER OBEY V.0444-045N LAEM CHABANG, THAILAND Laden on Board the Vessel: OCTOBER 11, 2025 ITAL BONUS V. 0474-113S AT LAEM CHABANG, THAILAND 1. Can we raise the discrepancy: “B/L ON BOARD NOTATION INDICATED PRE-CARRIAGE I/O OCEAN VESSEL”? According to ISBP 821 paragraph E6 (c) (i) when a bill of lading indicates place of receipt different from the port of loading and there is an indication of a means of pre-carriage, it is to bear a dated on board notation which also indicates the name of vessel and the port of loading stated in the credit. In the presented bill of lading, the “on board” notation refers to the pre-carriage vessel ITAL BONUS, instead of the ocean vessel EVER OBEY, even though the port of loading is stated as LAEM CHABANG, THAILAND. We would like to seek your opinion whether this should be considered a discrepancy, or whether it is acceptable given that both Place of Receipt (SAHATHAI, THAILAND) and Port of Loading (LAEM CHABANG, THAILAND) comply with LC field 44E (“Any port in Thailand”). If it is to be treated as a discrepancy, kindly indicate any relevant ICC Opinion or ICC Official Interpretation (e.g., from ICC Opinions R-series or TA-series) that supports this view. 2. Kindly also confirm whether the following two forms of on-board notation would both be acceptable under ISBP 821 E6(c) (i): + Option 1: Laden on Board the Vessel: OCTOBER 11, 2025 EVER OBEY V.0444-045N AT LAEM CHABANG, THAILAND Or + Option 2: Laden on Board the Vessel: OCTOBER 11, 2025 ITAL BONUS V. 0474-113S AT SAHATHAI, THAILAND