The treatment of SMEs loans in the New Basel Capital Accord: some evaluations

Fabrizio Fabi (), Sebastiano Laviola () and Paolo Marullo Reedtz ()
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Fabrizio Fabi: Banca d'Italia, Vigilanza Creditizia e Finanziaria, Servizio Concorrenza, Normativa e Affari Generali, Roma (Italy)
Sebastiano Laviola: Banca d'Italia, Vigilanza Creditizia e Finanziaria, Servizio Concorrenza, Normativa e Affari Generali, Roma (Italy)
Paolo Marullo Reedtz: Banca d'Italia, Vigilanza Creditizia e Finanziaria, Servizio Concorrenza, Normativa e Affari Generali, Roma (Italy)

BNL Quarterly Review, 2004, vol. 57, issue 228, 29-70

Abstract: In April 2003 the Basel Committee on Banking Supervision issued a third consultative paper on the new Basel Capital Accord (Basel II). The document contains substantial changes with respect to the previous proposal of January 2001, on which improvements were requested, among other aspects, regarding the too severetreatment foreseen for loans to small and medium sized enterprises (SMEs). The aim of this paper is to analyse the treatment of SME loans under the Basel II framework and to provide an empirical evaluation of the impact of the different proposals on a large hypothetical portfolio of Italian corporations. Our simulations indicate that the prudential treatment of SME loans foreseen in the last consultative document of theBasel Committee is not penalizing with respect to the current situation. Therefore, we should not expect a reduction of credit or an increase in interest rates on loans to this type of borrowers.

Keywords: Banking (search for similar items in EconPapers)
JEL-codes: G21 G28 G30 L25 (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (5)

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