Credit Risk in the Leasing Business -

The process of review of both the Basel Capital Adequacy Accord and the EU New Capital Adequacy Framework is now entering its final phase. Although leasing falls within the scope of the Basel Committee’s proposals for measuring appropriate capital requirements, little is known empirically about the credit risk associated with leasing. Many studies have recently been conducted in order to measure credit risk and assess the implications of the Basel Committee’s proposals, but none has considered certain distinctive characteristics of the leasing segment, such as physical collaterals.