Trade finance: Troubled waters

Sep 1, 2012

The eurozone crisis and a tightening regulatory screw have intensified a mismatch between emerging trade flows and the provision of trade finance. Latin American companies and

By Oliver O’Connell

European banks have a long history in Latin America, closely related to international trade. The 2008/09 global financial crisis placed many of them in a strong position as US banks backed off from trade finance lending.

But the eurozone crisis of 2011 triggered a reversal of fortunes, with a large-scale retrenchment of trade finance lending by European banks, which had been an essential part of the market. Gaps emerged – and were often exacerbated – in the provision of trade finance both direct to corporate clients and to financial institutions.

Today, a renewed European recession, a lackluster recovery in the US, and a slowdown in China, have compelled Latin American companies and their national governments to explore developing new trade and investment flows.

In 2011, Latin America’s exports grew 5.3% and imports 10.4% – well above the world average – but with global growth slowing there are...

To continue reading please take a free trial, subscribe or login below.

Already have an account?


Subscribe now for unlimited access to all current and archive news, data and market analysis. 


Free trial

Take a free two-week trial now for the latest news, data and market analysis.

Free Trial

Upcoming Events


Where will capital markets be busiest in 2017?


Popular Searches