The final draft of the Basel II Accord on banking, entitled "International Convergence of Capital Measurement and Capital Standards" has been introduced but its interpretation remains a moving target for those preparing for its implementation. Although predominantly a banking accord, preliminary interpretation shows Basel II has far reaching effects on all industries, including leasing. 

 

So what is the impact on the U.S. leasing industry of Basel II? Many leasing companies are saying; "Basel II does not affect them…" they are not a bank", and "they are not part of a major top ten bank…"

 

This is all true of course! But…

• There are banks that have leasing companies who will be impacted under Basel II.
• The survey conducted by the Foundation and White Clarke North America's own work indicates far more U.S. financial institutions are adopting Basel II capacity.
• The rating agencies (Moody's, S&P etc…) are looking more favorably at Basel II as a rating based indicator than previously thought
• Financial institutions looking to implement best practise will need to employ Basel II practises – to ultimately improve risk management
• Major financial institutions will look to switch capital requirements by product suite across portfolio – freeing up tactical capital on demand.