Are capital requirements for trade finance assets too high? GCD explored the data.

In 2011, the Basel Committee considered some early data from the International Chamber of Commerce Trade Register, suggesting it did not provide sufficient analytical evidence for reducing the CCF in the risk-based approach below 20%. 

Our newest report on CCF for Performance Guarantees and Claims – evidence from ICC and GCD, provides new evidence of an average CCF of less than 10%, confirming longstanding claims that the Basel figure might be too conservative. 

What do you think? Are trade finance capital requirements too high?

The report is now available here and was put together based on GCD's collaboration with the International Chamber of Commerce. We thank Philip Winckle and Michaël Dhaenens for their insight and help in drafting the paper.