Trade Credit and Risk Management

Chapter 3

Trade Credit Instruments in Capital Adequacy Regulation

Introduction

Starting in the late 1980s, financial intermediaries have had to comply with capital requirements based on recommendations developed by the Basel Committee on Banking Supervision. The worldwide adoption of these standards into domestic regulations currently involves more than 90 percent of global banking assets (Basel Committee on Banking Supervision 2017a). The final goal of ensuring the stability and soundness of the financial system has motivated the continuous review of these standards, leading to the evolution from Basel I to Basel III.1 The evolution of standards has been accompanied by the progressive enlargement of the scope of application through country-level ...