Transaction Banking and the Impact of Regulatory Change : Basel III and Other Challenges for the Global Economy

This book and the views expressed in it are solely the views of the author and do not represent the opinions, policy or views of any other third party with whom the author is or has been associated, including her employer, work colleagues or professional associates. There is no intention in this work save where expressly stated to refer to real life examples and any resemblance to real events other than where expressly stated is purely coincidental. This book takes you on a journey through post-crisis regulatory reform, highlighting the unintended consequences of some of the measures on transaction banking, a business that provides the backbone of financial markets. Transaction banking provides the backbone of the global economy, and is a key financial service offered by banks covering payments and cash management, trade finance, supply chain and securities services. Now with a wave of regulatory requirements such as Basel III the transaction banking business is being significantly impacted by both intended and unintended consequences. In this book, Ruth Wandhofer presents an insider's guide to the impact of regulation on the transaction banking business, exploring regulatory reform and the role of transaction banking. It provides a deep dive into Basel I - III that enables the reader to understand how these rules impact a bank's balance sheet, followed by a critical analysis of European and US payments regulation. It covers areas such as prudential rules; liquidity/capital; specific product related legislations for payment services; trade finance; potential impacts on competition; and what it means for the end user. Ruth also shares practical suggestions to reduce the unintended consequences of these measures on transaction banking and proposes an alternative regulatory model for prudential regulation. This book is essential reading for regulators, bankers, politicians, students and anyone with a curious mind Review: 'This book brings to light the "black hole" of international regulation and clarifies the role of transaction services in supporting the world economy. It is an essential navigation tool to understand unintended consequences of regulations on this vital business, where rectifying measures should be applied.' - Vitor Constancio, Vice President European Central Bank 'The importance of transaction banking services, such as trade finance, to the real economy has to be considered in the context of Basel III and other key legislative developments. This book constitutes a critical contribution to the design of the bank regulatory regime post-crisis, which needs to ensure that critical banking services can continue to be delivered in support of the global economy.' - Sharon Bowles, Former Member of the European Parliament and Chair of the Economic and Monetary Affairs Committee 2009-2014 Front Matter....Pages i-xx Regulation and Transaction Banking: A journey through a relationship at the crossroads....Pages 1-4 Post-Crisis Regulatory Change....Pages 5-57 Transaction Banking 101....Pages 58-86 The Journey from Basel I to Basel III: History and fundamentals explained....Pages 87-158 The Payments Special: Europe Versus the US....Pages 159-213 Impacts of Basel III and Other Regulations on the Transaction Banking Business....Pages 214-251 The Magic Mix: Or how to avoid future financial crises....Pages 252-272 Back Matter....Pages 273-285