Trade and Trade Finance in the 2008-09 Financial Crisis
IMF Working Papers, January 1, 2011
Source details
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- Trade and Trade Finance in the 2008-09 Financial Crisis
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Bibliographic details
- Authors: Thomas William Dorsey, Mika Saito, Irena Asmundson, Ioana Niculcea
- Published: January 1, 2011
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781455212507.001
Summary findings
- Global merchandise trade sharply declined in late 2008 and early 2009.
- 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.
Evidence from bank surveys and measurements
- Bank-intermediated trade finance: fell in value during the crisis (no numeric value provided in source text).
- Merchandise trade: fell by more than bank-intermediated trade finance (relative comparison preserved exactly as stated).
- Share of world trade supported by bank-intermediated trade finance: increased during the crisis despite higher pricing margins.
Interpretation and analysis
- The decline in trade cannot be primarily attributed to disruptions in trade finance based on available survey evidence.
- Increased pricing margins for trade finance did not prevent the relative share of bank-intermediated trade finance from rising.
- The working paper attributes the bulk of the trade reduction to factors other than trade finance (specific alternative explanations are indicated in the source as "other explanations" without further numeric detail).
Subject areas and keywords (as listed)
- 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