How Does the IMF Lend? A Factsheet

Progress Report to the International Monetary and Financial Committee (IMFC) on Crisis Resolution
September 5, 2003

Trade Finance in Financial Crises: Assessment of Key Issues

Prepared by Policy Development and Review Department
in consultation with International Capital Markets and
Monetary and Financial Systems Departments

Approved by Mark Allen

December 9, 2003

Use the free Adobe Acrobat Reader to view the full text (222 kb pdf file)


Executive Summary
I.   Introduction
II.   Causes of the Decline in Trade Finance
III.   Initiatives Taken During Recent Crises
IV.   Structural Measures to Strengthen Trade Finance Facilities
  A. Risk Differentiation by Rating Agencies and Bank Regulators
  B. Expanded Use of Capital Market Structures for Trade Finance
  C. Risk Sharing Among MDBs, ECAs, and Private Insurers
  D. Possible Modification of the Incentive Structure Governing Official ECAs
  E. Regional Approaches to Deal with Intra-Regional Trade
  F. Medium-Term Export Financing
  G. Institutional Reforms by Emerging Markets
V.   A Framework for Trade Finance in Crisis Resolution
  A. Measures by Country Authorities
  B. Efforts by the Official Sector
  C. Efforts by the Private Sector
  D. Efforts by the Fund
Glossary of Terms
Box 1. Lessons from Past Initiatives
Figure 1.Trade Credits and Short-Term Credit Lines for Selected Countries, 1995–2002