Who Needs Investment Banks? Trade Finance Makes a Comeback and Booms Amid The Global Crisis
GENEVA (Reuters) - Business is booming in the trade finance market as exporters and importers return to a tried and tested form of credit amid the chaos of the financial crisis, bankers in the sector say.
Demand for trade finance -- a traditional form of banking dating back to the Middle Ages -- is so strong that some houses say they are turning away business for lack of capacity.
Trade finance is the easiest, cheapest and most collateralized form of credit, industry experts say.
In recent years customers were lured away by investment banks and corporate finance departments offering sophisticated products, but now they are flooding back attracted by the simplicity and transparency of trade finance.
HT: Clover Aguayo
Bottom Line: Markets adjust. The invisible hand will survive any financial crisis.