WASHINGTON, D.C. – BAFT (Bankers Association for Finance and Trade), the leading global industry association for international transaction banking, urged U.S. federal banking regulators to adjust proposed rules revising capital requirements for banks, noting that proper treatment of trade finance products will help strengthen the U.S. dollar and reinforce the U.S.’s position as a global leader in trade. BAFT’s actions came as part of the comment period on the banking agencies’ rulemaking proposals to modernize the regulatory capital framework for U.S. banks, sometimes referred to as the “Basel Endgame.”
BAFT applauded the improvements in the approach from the previous rulemaking proposal noting that regulators focused on improving the calibration and risk sensitivity of risk weights, but urged them to take a closer look at trade finance products noting the demonstrably low-risk nature of trade-related items.
Many of the proposed changes, while technical in nature, would change the treatment of various trade finance products, capturing many existing supply chain finance programs that support the needs of businesses. Some of the changes to the risk weights for bank exposures likewise did not consider the unique nature of trade and did not reflect the true risk of various trade products.
“We urge the regulators to ‘sharpen their pencil’ on trade – particularly given the crucial role that trade finance plays in the U.S. economy, ultimately benefiting small businesses and consumers”, said Andrew Price, BAFT VP of International Policy.
BAFT urged the banking agencies to look closely at the unique nature of trade products and consider their broader impact on the economy.
A copy of the letter can be viewed here.
BAFT will host a webinar on July 16 at 10:00 AM ET titled, 2026 Basel III Overview: Where Things Stand Now. The webinar will provide insight into how these new proposals may impact institutions, highlight key issues raised in BAFT’s response to regulators, and offer participants the opportunity to ask questions directly with industry experts.
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About BAFT (Bankers Association for Finance and Trade)
BAFT is the leading global industry association for international transaction banking. Bringing together financial institutions, service providers, and the regulatory community, BAFT provides thought leadership, advocacy, education, and a platform for collaboration to promote sound financial practices that foster innovation, efficiency, and commercial growth. The association engages in a broad range of issues affecting transaction banking, including trade finance, payments, and compliance, helping members navigate a rapidly evolving global landscape. For more information about BAFT, visit baft.org, or follow BAFT on X (Formally Twitter), LinkedIn, and YouTube.