Eight years after the beginning of the financial crisis,regulators and financiers are still searching for the optimalbalance between encouraging global growth and implementingregulations on trade finance instruments that are adequate,equitable, and risk-aligned.

This is a crucial discussion, especially for developing nationsand the companies looking to do business there. Trade financeassists buyers and sellers by filling in the trade cycle fundinggap and removing the payment risk and supply risk. It is thereforea key factor in emerging-market development, as governments andregulators around the world recognize.

The International Chamber of Commerce's (ICC's) Trade Registerreport presents a global view of the credit risk profiles of tradeand export finance transactions, focusing on credit-related defaultand loss experience. This encompasses short-term products, whichtypically have a maturity of less than one year, such as issuedimport letters of credit (L/Cs), confirmed export L/Cs, import andexport loans, and performance guarantees and standby L/Cs. Thescope of medium- to long-term trade finance products is limited toproducts where an OECD Export Credit Agency (ECA) has provided astate-backed guarantee or insurance to the trade finance bank.

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