Mr Peter Moore
Investment Business Policy Department
FSA
10 April 2000
Dear Mr Moore
RESPONSE TO CP 43
We are responding on the questions that are most relevant for our membership, i.e. corporate treasurers and finance directors in medium to large companies.
Q 2.8 and 2.9 - Criteria for identifying intermediate customers
Message from the chairman of the committee Some of our readers may already be aware that this year marks the 21st anniversary of the formation of the Association of Corporate Treasurers.
Information on the Consultative Paper issued by the Basel Committee
on Banking Supervision "A New Capital Adequacy Framework"
The Association has responded to the proposals by the Basel Committee for a new capital adequacy framework. These proposals are important for borrowers because they may affect loan margins and loan documentation. The response expresses the Association's concern that the existing proposals could have negative implications for both of these for many borrowers.
Our comments relate primarily to the proposals for capital to cover credit risk and we are commenting only in general terms on the proposals for capital to cover other risks.
Sir David Tweedie
Chairman
Accounting Standards Board
FRED 19 - ACCOUNTING FOR DEFERRED TAX
I apologise for the late response to your Exposure Draft. It has taken some time for the implications of your proposals to filter through to our membership. The main areas of concern expressed to us may be summarised as follows:
1. the restriction, arising from changes in accounting treatment, in distributable reserves available to pay dividends and/or rearrange the capital structure of a business to improve shareholder value.
