When the new Basel proposals come into force in 2004, the effects
will be felt throughout the financial system. Corporate and
sovereign borrowers should see their borrowing costs increase or
decrease as a result of the change in bank asset weightings.
But credit analysts are hard pressed to detect any change in debt
prices following the release of the Basel proposals on January 16.
"The surprising thing in some ways is that there has been little
movement in spreads that can be linked to the proposals," says Raj
Malhotra, credit analyst at Goldman Sachs in London. "Some of the
information was already known and had been factored into bond
prices.
But for the most part people are taking a wait-and-see attitude.
Slowly, we could see some nuggets come out of the document that
make a difference to credit prices."
In the meantime, some of the biggest winners and...
