2013 - ICC India

ICC BANKING COMMISSION | 2013 GLOBAL RISKS TRADE FINANCE | PREFACEIPREFACEICC TRADE REGISTER,AN INITIATIVE FOR THEGLOBAL BANKING SYSTEMWhen world trade collapsed during the global economic meltdown thatbegan in 2008, trade and export finance suffered a resulting decline. Thetraditional role of trade and export finance as a low-risk asset class evencame into question amid the turmoil in global financial markets. Whenregulators and bankers tried to assess the trade and export finance pictureand its role during the crisis, timely, accurate and comprehensive datawere lacking.In 2009, the ICC Banking Commission established the ICC Trade Register toadvance understanding of various products and their risk characteristics intrade and export finance. This initiative assisted the industry in developinga pool of data to evaluate the long-held claim that trade and export financeis a relatively low-risk form of financing. It also provides a much-neededempirical basis for discussions regarding the treatment of trade financingunder the Basel framework.“ICC has beenuniquely placed tosupply timely andall-inclusive data ontrade and exportfinance to help thebanking industryand regulators makesense of this fastchangingsector.”Knowing the volume of trade and export finance and the likelihood ofdefault for trade and export finance products, the ICC Trade Register is vitalto crafting fair regulations necessary for a well-functioning global tradingand banking system. Because of its long tenure as a respected source ofindependent policy and market analysis, ICC has been uniquely placed tosupply timely and all-inclusive data on trade and export finance to help thebanking industry and regulators make sense of this fast-changing sector.Indeed, the ICC Trade Register and the present report, Global Risks TradeFinance 2013, present additional analytical methods and data that will beessential to adequately capture the magnitude and nature of risks intrade finance.The demand for further data that can provide a complete portrait of thetrade and export finance sector will only increase over the next 15 years, asglobal trade is poised to grow substantially. This need is made all the moreurgent, since a rebound in world trade is essential to propel the continuedrecovery of the global economy.Going forward, the ICC Trade Register will benefit from continuousimprovement. The use of additional data from an increasing number ofparticipating banks (21 in 2012) has been essential in providing significantadditional value to the ICC Trade Register. In addition, for the first time,medium and long-term export finance data were collected and analysed,which improved overall data availability and composition.We would like to thank the participating banks and all partners of the ICCTrade Register project for their continued support. I hope you find thereport informative, insightful and suggestive of new perspectives.THIERRY SÉNÉCHALEXECUTIVE SECRETARYICC BANKING COMMISSION