"Trade Finance and the Compliance Challenge: A Showcase of International Cooperation" underscores the vast trade finance gap of $1.5 trillion that currently exists and delves into the reasons why international banks are not engaging sufficiently in this financing. It highlights the challenge of regulatory compliance and the efforts made by international organizations, such as the WTO and the International Finance Corporation, to address the issue. Case studies describe the capacity-building projects undertaken with multilateral development banks to help improve the availability of trade finance.
Capacity-building projects led by the European Bank for Reconstruction and Development (EBRD), the Asian Development Bank (ADB) and the International Islamic Trade Finance Corporation (ITFC) are helping trade finance providers in developing countries deal with regulatory requirements, which in turn might help them process trade financing requests from small businesses instead of rejecting them, the book finds.
Over 400 professionals took part in the recent seminars described in the case studies. The 2019 programme of capacity-building by the development banks is likely to reach close to 1,000 participants in the countries most affected by the trade finance gap.
At the launch of the report, Director-General Roberto Azevêdo said:
"We have been conducting a new dialogue between the different partners to increase the understanding of the issues and seek potential solutions. We have stepped up our capacity building work in trade finance. The results of this partnership are showcased in this publication we are launching today.
"This mobilization is crucial to help traders and their financial institutions to adapt to the new regulatory environment. We need to keep sustained efforts to ensure that trade finance flows will return to countries which have been deserted, or de-risked, in recent years.
“This is a very good example of international cooperation in action, achieving real, practical results on the ground. The gaps I've described will not disappear overnight. They require the consistent efforts of our organisations and others, working together permanently. So let's keep up this momentum.” His full speech is available here.
IFC's CEO Philippe Le Houérou said:
“Low-income and fragile countries account for over half of our commitments under our flagship trade program and we aim to increase that share through various trade programs we have. We are also committed to continuing to work with the WTO and our colleagues from the multilateral development banks. Let us help central and local banks build capacity and implement new platforms and tools that effectively respond to compliance and regulation challenges. "
Other participants in the panel discussion were Bambang Susantono (Vice-President, ADB), Benedict Oramah (President, African Export-Import Bank), Hani Salem Sonbol (Chief Executive Officer, ITFC) and Francis Malige (Managing Director, Financial Institutions, EBRD).