Basel II experts shift focus to securitisation after SME solution
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The German government, which faces elections in September, responded to the SME compromise by lifting its objections to the Basel II accord. Germany, along with a number of other countries, had feared the original Basel II proposals would penalise bank lending to smaller companies, which they regarded as the engine of economic growth.
Solution The SME solution is along lines previously foreshadowed by regulators. It centres on allowing banks to set aside on average 10% less protective capital
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