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ECAs sustain trade in a tough year
17 December 2009
In a risk averse market in which liquidity is hard to come by, ECAs are the natural fallback option to keep trade flows going. Naomi Christie looks at how ECAs have responded to the fallout of the banking crisis over the last 12 months.
Read more:
export credit banking crisis
ECA direct lending
US ex-Im take out
This article appears in the December 2009/ January 2010 print edition of Trade Finance.
The litmus test for an export credit agency (ECA) when considering involvement with a deal, is whether the transaction can take place without its support. The crisis has led to an increase in margins and retreat by banks to their core clients over the last year, leaving trade flows under threat. The first to suffer have been smaller businesses. ECAs are the natural choice to keep trade flows going due to their state backing and capacity to fill gaps in the provision of both guarantees and finance. ECAs are also being driven to be more flexible and innovative and this has, in many cases, made the difference.
The G20 group of countries announced in April that their states would make Eu250 billion ($366 billion) available for trade financing, giving ECAs further mandate to step up to...
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