Trade and Trade Finance in the 2008-09 Financial Crisis

By Thomas William Dorsey, Mika Saito, Armine Khachatryan, Irena Asmundson, Ioana Niculcea

January 1, 2011

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Thomas William Dorsey, Mika Saito, Armine Khachatryan, Irena Asmundson, and Ioana Niculcea. Trade and Trade Finance in the 2008-09 Financial Crisis, (USA: International Monetary Fund, 2011) accessed December 3, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Global merchandise trade sharply declined in late 2008 and early 2009, and some press and financial market reports assigned a large role for the decline to trade finance. However, the available evidence suggests that shocks to trade finance were not the major factor in the decline in trade. Surveys of commercial banks by the IMF and others found that while bank-intermediated trade finance fell in value during the crisis, it fell by less than merchandise trade. As a result, the share of world trade supported by bank-intermediated trade finance increased despite higher pricing margins. Other explanations appear to account for the bulk of the reduction in international trade.

Subject: Banking, Basel II, Export credits, Exports, Financial regulation and supervision, International trade, Trade finance, Trade in goods

Keywords: Bank, Basel II, Cost of funds, Export credits, Exports, Global, Lending guideline, Merchandise export, Merchandise trade, Merchandise trade Index, Trade, Trade finance, Trade finance, Trade growth, Trade in goods, Trade transaction, WP

Publication Details

Pages:

65
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2011/016
Stock No:

WPIEA2011016
ISBN:

9781455212507
ISSN:

1018-5941

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