PODCAST | Short-term, self-liquidating, is trade finance as an asset class on the up?

As the world economy faces severe headwinds, banks stand at the crossroads of rigorous regulatory requirements and an escalating demand for trade finance on the back of soaring inflation rates.

Concurrently, capital restrictions continue to hinder banks’ ability to fund trade finance deals, resulting in further exacerbating the global trade finance gap.

However, as banks rethink their risk exposure, trade finance asset distribution steps into the spotlight as the key to reversing the tide. By extending their reach to non-bank investors, banks are not only mitigating risk but are also opening up new avenues of much-needed liquidity into the trade finance ecosystem.

At the ITFA annual conference in Abu Dhabi, TFG’s Mark Abrams spoke with Nishit Kumar, Senior Director, Head of Loan Syndications, Sales and Distribution at Mashreq Bank, and Kamola Burikhodjaeva, Executive Director, Head of Americas Distribution at J.P. Morgan.

PODCAST | ITFA: The tale of Article 506 and the transition period

At the International Trade Forfaiting Association (ITFA) 49^th Annual Trade and Forfaiting Conference in Abu Dhabi, TFG’s Deepesh Patel spoke to Silja Calac, Board Member, and head of the ITFA Insurance Committee to learn more about credit risk insurance and its importance for trade, as well as specific aspects of the implementation of the Basel 3.1 Regulation. 

Credit risk insurance is a risk mitigation tool used by banks to cover credit risks related to transaction banking. 

This means that the bank substitutes the probability of default (PD) and loss given default (LGD) of the original obligor of a transaction by the PD and the LGD of the insurance. 

In this way, banks can enhance their credit capacity and reduce risk-weighted assets. 

As a result, Calac said, “Credit risk insurance is absolutely crucial for our economic system.” 

VIDEO | The future of trade: NFTs and a metaverse economy

Africa stands on the brink of remarkable economic growth. If given the right tools and with the support of the international community, the continent could truly become unstoppable. 

Yet, holding it back are cascading and intertwined challenges, with access to trade finance surfacing as a major impediment to its economic progress.

At ITFA’s 49th Annual International Trade and Forfaiting Conference in Abu Dhabi, TFG’s Deepesh Patel sat down with Gwen Mwaba, Director & Global Head, Trade Finance at African Export-Import Bank (Afreximbank). Their discussion revolved around the pressing issues facing African trade finance and the active role of DFIs in fostering African trade. 

VIDEO | CEO insights: Driving UAE’s economic diversification from oil to knowledge

Navigating the intricacies of international trade presents a host of challenges for businesses, particularly when it comes to financial risk management. Credit and counter-party exposure now rank among the top concerns in today’s rapidly evolving credit risk environment, underscoring the significance of credit insurance as a valuable tool to support a business’ ambitions.

Leading the charge in the UAE is Etihad Credit Insurance (ECI), the federal export credit company, devoted to elevating the international competitiveness of UAE businesses. 

In this episode of Trade Finance Talks, TFG’s Deepesh Patel sat down with Raja Al Mazrouei, CEO of Etihad Credit Insurance, to discover how ECI is not only encouraging UAE businesses to tap into emerging regional and international markets but also enabling them to scale new heights and achieve sustainable growth.

VIDEO | The Middle East in focus: Between resilience and turbulencece challenges for SMEs

The Middle East, strategically situated at the crossroads of Europe, Asia, and Africa, with its substantial oil reserves, has long been a central player in global trade. 

Today, this tricontinental hub not only maintains its strategic positioning but also boasts robust infrastructure and government-backed initiatives aimed at economic diversification, paving the way for significant growth and development.

In this episode of Trade Finance Talks, TFG’s Deepesh Patel spoke with Robert Besseling, CEO at Pangea-Risk to explore the current landscape of the Middle East region, shedding light on the opportunities, challenges, and evolving economic prospects in the face of the ongoing events.

VIDEO | ITFA Abu Dhabi quickfire: 6 key updates in 6 minutes

At the 49^th Annual Trade and Forfaiting Conference held at ITFA Abu Dhabi, TFG’s Deepesh Patel spoke with Sean Edwards, Chairman of the International Trade and Forfaiting Association (ITFA), about some of the key themes emerging throughout the conference in a quickfire session. 

Sustainability is a priority for ITFA but is approached from a slightly different angle compared to other trade associations. ITFA’s focus is on assisting banks’ efforts in reporting to regulators. 

Edwards pointed out that, “The current state of the dialogue between the regulators and the regulated is not great.” 

VIDEO | The evolving landscape of global trade asset and risk distribution

At the ITFA conference in Abu Dhabi, Trade Finance Global (TFG) spoke with Khilola Turaeva, the Head of Trade Risk Distribution for GTS EMEA at Bank of America to speak about the world of global trade asset and risk distribution. 

In recent years, the trade distribution market has experienced a high level of activity, requiring constant adaptation to a dynamic environment. 

For one, the legal framework governing risk distribution has undergone significant evolution, largely attributed to organisations like ITFA and BAFT. Industry-standard documents like the Master Risk Participation Agreement (MRPA) have been updated to reflect these changes. 

VIDEO | Africa spotlight, How can we grow risk distributions and syndications in trade finance?

At the ITFA annual conference in Abu Dhabi, Trade Finance Global (TFG) spoke with Mosa Tshabalala, Head of FI Trade Sales (International), Risk Distribution and Syndications at Absa Group, to explore the role of trade finance risk distribution in the African context.

As the second-largest bank in Africa, Absa’s approach to risk distribution centres around its originate-to-distribute strategy, which involves originating numerous transactions on the continent and distributing some of those assets through various channels.

Tshabalala said, “Distribution plays a major role in creating further capacity for lending or providing finance [to help close the $2.5 trillion trade finance gap]. It’s extremely important that there is a market for distribution.”