the survey, nodes of uncertainty over the US presidential election results,
crises in the Middle East, and Sino-Japanese tensions all contributed to the
lacklustre pace of world trade which fell back to 3.8% growth in 2012, down
from 6.1% the previous year. Sluggishness in the Eurozone economy prompted weak
global demand by midyear, as economies in China, India, Brazil and other
emerging markets slowed down in turn.
proliferation of new regulation in recent years has increased cost pressure on
financial institutions and depressed markets. Some 65% of surveyed experts said
implementation of Basel III regulations is to some extent or a large extent
affecting the cost of funds and liquidity for trade finance. While many
regulatory changes have already been implemented or proposed, the regulatory
future remains unclear as harmonization of regulatory principles remains a
major problem for trade financiers and their clients.
positively indicates that despite uneven performance around the world in 2012,
the market for trade finance does show signs of slow and steady growth, with
temporary trade measures imposed during the financial crisis – including the
rise in fees for trade –slowly being removed.
that financial intermediaries are continuing to satisfy the demand for
financing and that investing in trade assets is part of a more sustainable
model of banking, said Pascal Lamy, Director-General of the World Trade
Organization, in the survey’s foreword.
Entitled Rethinking Trade and Finance – An ICC
Private Sector Development Perspective, the ICC survey reveals that
developing economies remain the drivers of international trade growth despite
the ever-rising level of regulation in the wake of the financial crisis and a
clear trade finance gap for small- and medium-sized enterprises (SMEs) in the
southern hemisphere. Yet the resilience and increasing importance of
developing countries has become more evident, according to the survey, which
says that although developing country exports fluctuated throughout the year,
they surpassed pre-crisis levels rising to 8.5% in 2012.
facilitation programmes by multilateral development banks (MDB) also increased
in 2012 according to the survey, which predicts the role of MDBs will become
even more instrumental in supporting global recovery, economic development and
poverty alleviation in future years.
includes analysis of trade traffic data, from financial messaging service
provider SWIFT, indicating that by the year 2020, a third of global trade will
likely be South-South. The data reveals a signature shift in the Asia-Pacific
region where 73% of all export transactions took place in 2012 together with a
rise of 2.32% in import traffic. By contrast, import traffic decreased
most noticeably in the Europe-Euro zone: a drop-off of 13.5%.
encouraged by the continuing effort to fine tune various capital treatments for
trade finance whether at the supranational level, or in national
implementation. It is important for the business community to press on with the
current dialogue with regulators as there is still a lot to be done. On the
macroeconomics front, we also expect to see a credible plan in place for the
budget issues that are plaguing certain countries, leading to restored
confidence but perhaps with a longer drawn out and bumpier recovery than we
hope for,” said Kah Chye Tan, Vice-Chairman, Corporate Banking, Barclays, and
Chair of the ICC Banking Commission.
detailed statistical analysis of the regional and global trends in trade
finance, Rethinking Trade and Finance 2013 received responses from
representatives of 260 banks in 112 countries. Expanded in scope, the 2013
Survey includes a new section on potential market developments, which includes
the views of some of the world’s leading experts in global trade finance on the
drivers and potential solutions to a more robust and resilient market.
survey also received the participation of two new partners: the International
Trade Centre (ITC), to cover credit constraints and non-tariff measures in
trade; and Factors Chain International (FCI), providing business trends in
Trade and Finance 2013 fulfils ICC’s commitment to bridge the information gap
on trade finance through market intelligence reporting and monitoring that
leads to a better understand and markets worldwide.
Senechal, ICC Banking Commission Senior Policy Manager said: “Trade finance is
the oil that powers the engine of global economic growth but despite
encouraging signs, this stellar image of the industry is imperilled as trade
finance faces headwinds that may completely upend the global landscape in which
it operates in the next five years. This includes a welter of regulations, a
two-speed financial system, a disruptive deleveraging process and new
SME entrants starved of trade finance in several emerging countries.”
Download 2013 Rethinking Trade and Finance
For more information visit the ICC Banking Commission