Banks impose unwarranted requirements
“Economic growth depends largely on the capacity of G20 governments to improve the conditions for international trade, including easing trade finance rules. However, what we’re seeing is that protectionist measures are growing within the G20.” Jean-Guy Carrier, ICC Secretary General
Reliable and cost-effective financial guarantees for the import and export of commodities, consumer goods, and capital equipment are critical to trade flow between counties. However the rules set by bank regulators, for trade finance, impose unwarranted capital requirements, choking trade and having adverse impacts on growth.
An International Chamber of Commerce (ICC) October 2011 report shows trade finance should not be feared by banks, nor overregulated by governments. The ICC report calls on standard setters and policy makers to carefully study the potential unforeseen impact of proposed Basel III changes on trade finance from the Basel committee and to make trade finance more accessible and affordable. The Basel Committee on Banking Supervision has also recognized trade finance as a low-risk activity for banks.
Read More: ICC report proves trade finance is low risk
