International trade is central to the world economy and economic development, and a critical engine of growth across industries and markets. Indeed, pre-crisis trade had been increasing at twice the rate of GDP growth1 as existing corridors grew and new ones opened with the industrialization of developing economies.
Trade Finance underpins much of this trade, and provides importers and exporters with the financing and risk mitigation that allows them to transact with distant and often unfamiliar counterparties.
The 2017 report corroborates findings from previous years that Trade Finance products present banks with short average maturities, and little credit risk, with low default rates and loss rates. While this low credit risk profile is set to remain, Trade Finance is facing a number of changes to which banks must respond: