Trade Finance Survey 2015: The trade route to securitization
Trade finance has been overhauled since the global financial crisis and as a new normal landscape emerges, new ways of doing trade are coming to the fore, pushing traditional forms to the background. More securitization is clearly top of trade finance clients’ agenda.
The years immediately following the global financial crisis shook trade finance to its core. Liquidity dried up, new regulations emerged, exports slowed down. Yet, in the following years, trade managed not only to emerge, it began to thrive.
This came down in no small part to the willingness of trade finance providers to develop new ways of bringing funding to their clients.
To assess the scale of change to the market, the Euromoney Trade Finance Survey has explored how trade is developing in the face of emerging south-south corridors, rising emerging market currencies, and political sanctions. One of the most significant findings of the survey is that 78% of respondents want to see greater use of securitization in global trade finance.
Respondents in Asia and western Europe were the most keen to see a greater shift towards securitization, with 75% of Asia-based respondents wanting greater use of the technique in trade finance. The desire to see greater use of securitization was lower in the US, which is not surprising given the already existing widespread securitization of trade receivables.