Bridging the Gap: The Regulatory Dimension of Secured Transactions Law Reforms

Abstract

The lack of coordination between secured transactions law and capital requirements generates tensions in the legal framework governing extension of credit secured by movable assets. Contrary to common assumptions, secured transactions law reforms do not necessarily improve access to credit if regulatory considerations are not properly addressed. With primary reference to the Basel Capital Accords and the UNCITRAL Model Law, this article isolates the regulatory requisites for security rights in movable assets to reduce capital requirements. Moving from this analysis, this article then offers a regulatory strategy to sustain secured transactions law reforms at the national level.

Keywords: Secured Transactions Law Reforms, Security Rights, Collateral, Secured Credit, Basel Capital Accords, Basel III, Capital Adequacy Ratio, UNCITRAL, Model Law on Secured Transactions, Credit Risk, Collateral, RWA, Regulatory Capital, Credit Risk Mitigation

JEL Classification: K10, K11, K22, K23, G21, O57