Diamond Finance

Basel II for Diamond Companies

In 1988, the first Basel Capital Accord set minimum capital or equity requirements for banks, which in turn set capital requirements for their customers. The Basel II Framework is intended to promote a more forward-looking approach to capital supervision, one that encourages banks to identify the risks they may face.

But what does this mean for diamond and jewellery companies? Higher rates of interest and higher equity requirements.

Under Basel II, banks will no longer be able to rely on personal guarantees backed only by a phone call to Geneva or on subordinated supplier credit from goods purchased from a Bahamas company in 1995. As the central banks will be responsible for supervising individual banks and inspecting their Basel II procedures, lunch with the branch manager will not be enough to ‘sort out the problem.’

For more information about our professional Basel II diamond company review and how to improve your position with your bank call:

CFOPLUS +32 472 23 66 55

YFO +32 498 51 70 79

Or send an email to Basel II

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