Effects of the New Basel Capital Accord on Bank Capital Requirements for SMEs Export

@article{2005_AltmanSabato, abstract = {Using data from three countries (US, Italy and Australia) and surveying related studies from several other countries in Europe, we investigate the effects of the New Basel Capital Accord on bank capital requirements for small and medium sized enterprises (SMEs). We find that, for all the countries, banks will have significant benefits, in terms of lower capital requirements, when considering small and medium sized firms as retail customers. But they will be obliged to use the Advanced IRB approach and to manage them on a pooled basis. For SMEs as corporate, however, capital requirements will be slightly greater than under the existing Basel I Capital Accord. We believe that most eligible banks will use a blended approach (considering some SMEs as retail and some as corporate). Through a breakeven analysis, we find that for all of our countries, banking organizations will be obliged to classify as retail at least 20\% of their SME portfolio in order to maintain the current capital requirement (8\%).}, author = {Altman, Edward and Sabato, Gabriele}, citeulike-article-id = {405874}, citeulike-linkout-0 = {http://dx.doi.org/10.1007/s10693-005-4355-5}, citeulike-linkout-1 = {http://www.ingentaconnect.com/content/klu/fina/2005/00000028/F0030001/00004355}, doi = {10.1007/s10693-005-4355-5}, issn = {0920-8550}, journal = {Journal of Financial Services Research}, keywords = {bank, banking, basel, capital, credit, finance, retail, sme}, month = {October}, number = {1-3}, pages = {15--42}, posted-at = {2006-09-04 13:20:02}, priority = {0}, publisher = {Kluwer Academic Publishers}, title = {Effects of the New Basel Capital Accord on Bank Capital Requirements for SMEs}, url = {http://dx.doi.org/10.1007/s10693-005-4355-5}, volume = {28}, year = {2005} }

TY - JOUR ID - 2005_AltmanSabato L3 - citeulike-article-id:405874 N2 - Using data from three countries (US, Italy and Australia) and surveying related studies from several other countries in Europe, we investigate the effects of the New Basel Capital Accord on bank capital requirements for small and medium sized enterprises (SMEs). We find that, for all the countries, banks will have significant benefits, in terms of lower capital requirements, when considering small and medium sized firms as retail customers. But they will be obliged to use the Advanced IRB approach and to manage them on a pooled basis. For SMEs as corporate, however, capital requirements will be slightly greater than under the existing Basel I Capital Accord. We believe that most eligible banks will use a blended approach (considering some SMEs as retail and some as corporate). Through a breakeven analysis, we find that for all of our countries, banking organizations will be obliged to classify as retail at least 20% of their SME portfolio in order to maintain the current capital requirement (8%). IS - 1-3 JF - Journal of Financial Services Research SN - 0920-8550 EP - 42 TI - Effects of the New Basel Capital Accord on Bank Capital Requirements for SMEs PB - Kluwer Academic Publishers VL - 28 SP - 15 KW - bank KW - banking KW - basel KW - capital KW - credit KW - finance KW - retail KW - sme AU - Altman, Edward AU - Sabato, Gabriele PY - 2005/10// UR - http://dx.doi.org/10.1007/s10693-005-4355-5 ER -