CHAPTER 4It Takes an Ecosystem: The Future of Trade Financing

Alexander Malaket

The financial crisis of 2008 saw steep falls in the value of global trade.1 Ten years later, international trade is finally regaining its familiar place as a driver of global economic growth, even as geopolitical developments, trade wars and local political imperatives combine to create headwinds. Before the crisis, trade financing – often seen as an arcane specialism – was rarely part of mainstream economic discussion. Now the role of financing – specifically trade finance and supply chain finance – in enabling global commerce is more widely appreciated, with estimates from various sources, such as the World Trade Organization (WTO), suggesting that 80% of merchandise trade flows worth US$16tn–20tn annually depend on some form of trade-related financing. US$5tn or more in services trade also relies on adequate levels of financing.

This is as true for large corporates as it is for small and medium-sized enterprises, and is a feature of international business in Organisation for Economic Co-operation and Development (OECD) economies as ...

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