Treasurers Already Feeling Basel III’s Impact, says EuroFinance

A “surprising level of impact” is already being felt by Europe’s corporate treasurers ahead of the full implementation of the Basel III capital adequacy regime, reports EuroFinance.

The conferences, training and research provider, launching its Basel III index measuring the impact of the Basel III reforms on corporate banking products, says that over a third of corporate treasurers already feel that the pricing and service they get from their banks has been negatively affected by bank regulations.

EuroFinance will update the index every six months, monitoring the ongoing shifts in the price and availability of core treasury products.

The first iteration reflects the responses of 227 treasury executives to a series of questions on the pricing and availability of core risk management, credit and cash management products and services. The answers are assigned weightings to reflect the relative importance of each product/service and the scores are combined to create a measure of how many more treasuries are being impacted and in what areas.

“Surprisingly, even though many of the banks’ Basel III deadlines are some way off, the index shows that a significant number of treasurers are already experiencing significant changes to their operating environment: from a base level of 100 on November 29 2014, the initial index calculation is 123 on May 29 2015,” comments EuroFinance.

Among other key findings from the first EuroFinance Basel III index:

• Thirty-eight per cent of companies already feel that the pricing and service they get from their banks has been negatively affected by bank regulations. A further 46% expect them to deteriorate in future.
• Twenty-four per cent of companies who use term bank credit have seen a price increase.
• Forty per cent of companies have had a bank withdraw services from a country in which they operate.
• Twenty-two per cent of companies with a pooling arrangement have had the service changed or withdrawn, while 23% have had a bank refuse a deposit.
• Forty-five per cent of companies with revenues above US$10bn have had a deposit refused versus 14% of companies with revenues below US$1bn.

The full report may be accessed at www.eurofinance.com/baselreportJune15