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Challenges ahead for EBRD’s TFP
23 November 2009
The EBRD’s trade facilitation programme (TFP) has been a lifeline for trade finance deals in the CIS region. Dickon Harris analyses the numerous challenges facing the programme.
Read more:
EBRD trade facilitation programme
Istanbul trade finance
CIS correspondent banking
Eastern Europe and the CIS have been badly hit by the financial crisis. Bankers wanting to do deals in emerging Europe have had to face a general increase in payment risk and have seen a deterioration of their risk weighted assets in the region.
Trade finance also guzzles more capital now as banks have to pay for increased provisioning on deals thanks to Basel II requirements. Even if banks are not directly exposed to write-offs – their counterparties may be which then limits their appetite for risk-sharing on other deals. And this is of course before international banks start examining the problems of weakening currency exchange rates making banks’ existing external debt look painfully expensive.
But trade finance deals are still being done. The region has proved remarkably resilient, especially in light of the dire predictions espoused...
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