Basel regulators hope for SME solution by mid-June

Global banking regulators said in late April they were optimistic they could resolve by mid-June the vexed question of the treatment of lending to small to medium-sized enterprises (SMEs) under the Basel II bank capital adequacy accord.

German business leaders were told around the same time by William McDonough, chairman of the Basle Committee on Banking Supervision, that the likelihood is that bank loans to SMEs would attract lower capital charges than loans to larger companies that are otherwise rated the same.

He also said the design of accord would allow for a number of loans to SMEs to be treated like consumer loans, as opposed to corporate loans.

Politically sensitive
The politically-sensitive issue has dogged the

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