Consequences of basel II for small and mid-sized enterprises

Scholarly Research Paper from the year 2002 in the subject Business economics - Investment and Finance, grade: 1,3, Hogeschool Zeeland (unbekannt), language: English, abstract: Inhaltsangabe:Abstract:
At present, rating is the number-one-topic discussed, both within the banking community and also, even more frequently, at enterprises. The second consultative package of the Basel Committee for Banking Supervision provides a basic change in equity capital contribution of banks. It is expected to change the rules of the credit business with institutional customers considerably. As a result, especially small and mid-sized enterprises are forced to enhance their credit standing in order not to struggle with the serious consequences of Basel II. This case study shows how!


Inhaltsverzeichnis:Table of Contents:
1.INTRODUCTION4
1.1Overview4
1.2Definition of the new Basel Capital Accord4
1.3Targets5
1.4Structure5
2.BASICS6
2.1Small and mid-sized Enterprises (SMEs)6
2.1.1Definition of SMEs6
2.1.2EconomicSituation andImportance ofSMEs7
2.2Rating7
2.2.1Credit ratings7
2.2.2External ratings by rating agencies8
2.2.3Bank-internal ratings9
2.2.4Function of credit ratings10
2.2.5Rating procedure and structure12
2.2.6Rating as an opportunity to prepare for Basel II16
3.BASEL II - THE NEW BASELCAPITAL ACCORD18
3.1The Basel Committee of Banking Supervision18
3.2The way from Basel I to Basel II18
3.3Overview of the new Capital Approach19
3.3.1The first Pillar: Minimum Capital Requirements19
3.3.1.1In context of granting credits to small and mid-sized companies23
3.3.1.2Possibilities of asset securitisation26
3.3.2The second Pillar: Supervisory Review Process27
3.3.3The third Pillar: Market Discipline27
4.THE CONSEQUENCES OF BASEL'S RESOLUTIONS29
4.1Current financial requirements of the small to medium-sized business sector29
4.2Internal vs. external rating of SMEs31
4.3Actual preparation status of SMEs35
4.4Rating under aspects of Investor Relations42
4.5Alternative financing possibil