topleft
topright

Login or Register


Red-Hot Thread

"The corporate brand is not only used to improve competitive positioning and express company aspirations, it can also be a powerful tool to motivate employees."

CFOZone Experts

Opinions and views from expert CFOZone members.


Jan 24
2011

Could Basel III push greater transparency in bank fees?

Posted by dbedell in trade financeCashborrowingBasel III

dbedell

With costs varying greatly for different bank services, companies are seldom given insight into what drives their banks’ fee structures and often can feel held hostage to high bank fees with no mechanism to address it.

Particularly since the crisis began and liquidity became tight, companies have often focused more on simple liquidity availability than in bartering for the best fee structure for that access to capital.

As the liquidity picture changes somewhat, executives are left to wonder whether fees associated certain products-–take, for example, the high fees invariably connected to letters of credit (LC) or other trade finance products—are commensurate with the services provided.

By increasing transparency into bank capital requirements, some companies have hopes that it could push banks to provide greater clarity into how they structure fees on both the borrowing side and the account management side. One corporate advocacy group that just formed in Europe—the European Treasurers Council—has even posited that lobbying might be the way forward for increasing transparency into bank fees.

However, whether Basel III or corporate advocacy have an impact, the fact remains that at present there is a broad variance in terms of different banks’ fees for the same or similar services.

As companies begin to regain some leverage in their banking relationships, a review of fee structures, an in-depth discussion with banking partners over what makes up those fees, and perhaps a negotiation process around banking fees, might be in order.

 

Comments (0)Add Comment

Write comment
You must be logged in to post a comment. Please register if you do not have an account yet.

busy
Copyright © 2009-2014 CFOZone. All rights reserved. CFOZone is a property of PSN, Inc.