Thursday, October 09, 2008

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.

7 Comments:

At 10/09/2008 11:48 AM, Blogger Bill said...

nad can you cite a couple of the firms inthis "space"?
Thank you.

 
At 10/09/2008 11:55 AM, Anonymous RebelRenegade said...

Wait, you mean we don't need the govt to intervene? WHO KNEW?

 
At 10/09/2008 12:01 PM, Blogger OBloodyHell said...

> The invisible hand will survive any financial crisis.

Yeah? What about Obama's bone saw?

 
At 10/09/2008 1:38 PM, Anonymous Anonymous said...

Bill,
I don't know about other firms, but UPS has a subsidiary company, UPS Capital, which provides this type of financing to some of its customers.
db

 
At 10/09/2008 4:39 PM, Blogger bobble said...

"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."


good riddance. all the IBs did was charge exorbitant fees.

 
At 10/09/2008 10:43 PM, Anonymous Anonymous said...

http://online.wsj.com/article/SB122358462591820299.html?mod=rss_whats_news_us

Gov. Arnold Schwarzenegger now says California may not need emergency federal funds after all.

"In a letter to U.S. Treasury Secretary Henry Paulson on Thursday, Gov. Schwarzenegger said a $750 million bond sale in Massachusetts this week, as well as recent actions by the federal government -- including last week's passage of a $700 billion financial bailout bill -- "appear to be improving liquidity."

 
At 10/10/2008 6:26 AM, Blogger Bill said...

thank you foryournote about UPS

 

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