The trade finance survey was conducted by Singapore, which chairs the APEC meetings this year, following the discussion on trade financing at the APEC Senior Officials’ Meeting – Senior Finance Officials’ Meeting (SOM-SFOM) Dialogue held in Singapore in February 2009.
The survey found that trade finance was an area of concern for most APEC economies, with 16 out of 18 economies surveyed saying that they faced some problems in trade financing. The most commonly cited reasons for tightness in trade financing were increased risk aversion of financial institutions towards companies, higher perceived counterparty risks, and general liquidity shortage in the economy. In particular, of the 16 economies that faced trade financing problems in their economies, 13 economies noted that risk aversion of financial institutions towards companies had increased since the onset of the global economic crisis late last year. In contrast, only 2 economies felt that the trade financing problem was precipitated by higher capital costs or increased capital requirements of banks.
The survey also found that APEC economies had the general mechanisms to tackle the trade finance challenge. 17 of the 18 surveyed APEC economies already had existing programmes to support trade finance in their economies. In response to the crisis, 15 of the 18 surveyed economies had implemented new programmes, or enhanced existing schemes, to support trade finance in their economies. In particular, half of these 18 economies implemented new or enhanced export credit insurance schemes.
The survey results on trade financing were presented at the APEC SOM-SFOM Symposium held in
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