Banking Archives

USCIB Gives Feedback on OECD New Approach to Economic Challenges Project

Published on January 22, 2015
L-R: Rick Johnston (Citi), David Mallet (Wells Fargo), Tom Molitor (Wells Fargo), Mathilde Mesnard (OECD), Peter Robinson (USCIB) and William Hynes (OECD).
L-R: Rick Johnston (Citi), David Mallet (Wells Fargo), Tom Molitor (Wells Fargo), Mathilde Mesnard (OECD), Peter Robinson (USCIB) and William Hynes (OECD).

USCIB and member representatives met with officials from the Organization of Economic Cooperation and Development (OECD) on January 22 at USCIB’s New York office to give feedback on the OECD’s New Approach to Economic Challenges (NAEC), aimed at updating the organization’s instruments and policy analyses.

USCIB President and CEO Peter Robinson met with the main authors of the NAEC report, Mathilde Mesnard and William Hynes, along with member representatives from Citigroup, Wells Fargo and JPMorgan Chase.

The informal meeting gave USCIB an opportunity to provide member feedback and concerns at this stage of the NAEC project.

USCIB is the American affiliate of the Business and Industry Advisory Committee to the OECD (BIAC), which acts as the voice of business in the OECD and has provided structured input to the NAEC project.

The OECD’s final synthesis report on its NAEC work will be delivered to OECD ministers in June 2015.

 

Register for ICC’s Banking Supply Chain Summit

Published on September 5, 2014

4825_image002Given the volatile economic climate in the wake of the financial crisis, innovations in working capital flows are more vital than ever before. That is why USCIB and its global network are focusing on the establishment of new financial solutions that will enable companies to maintain a resilient supply chain.

USCIB invites you to join a gathering of the world’s leading supply chain finance experts for timely and thoughtful discussions about the forces driving change in trade finance.

ICC’s 3rd Annual Supply Chain Financing Summit
October 22-23, 2014
Maison des Arts et Métiers
Paris, France

 
This summit will provide an opportunity for large and small companies to learn from experienced global professionals about their visions and strategies in the new area of supply chain finance. Topics of discussion include streamlining of trade finance operations, the changing landscape from the BPO (bank payment obligations) perspective, the impact of the regulatory environment, dealing with logistical hurdles, and more. The chair of USCIB’s Banking Committee, Michael Quinn (JP Morgan), will speak at a panel titled “BPO: From Conception to Adoption.”

In addition, prior to the summit on October 21, participants will have the chance to take part in a web-based simulation game where they’ll learn to balance the constraints and manage the interdependencies of the physical and financial supply chain.

USCIB members may register online for the event at a discount by entering the code USA-9262.

Staff contact: Eva Hampl

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Register for ICC’s Banking Supply Chain Summit

Published on September 5, 2014

4825_image002Given the volatile economic climate in the wake of the financial crisis, innovations in working capital flows are more vital than ever before. That is why USCIB and its global network are focusing on the establishment of new financial solutions that will enable companies to maintain a resilient supply chain.

USCIB invites you to join a gathering of the world’s leading supply chain finance experts for timely and thoughtful discussions about the forces driving change in trade finance.

ICC’s 3rd Annual Supply Chain Financing Summit
October 22-23, 2014
Maison des Arts et Métiers
Paris, France

 
This summit will provide an opportunity for large and small companies to learn from experienced global professionals about their visions and strategies in the new area of supply chain finance. Topics of discussion include streamlining of trade finance operations, the changing landscape from the BPO (bank payment obligations) perspective, the impact of the regulatory environment, dealing with logistical hurdles, and more. The chair of USCIB’s Banking Committee, Michael Quinn (JP Morgan), will speak at a panel titled “BPO: From Conception to Adoption.”

In addition, prior to the summit on October 21, participants will have the chance to take part in a web-based simulation game where they’ll learn to balance the constraints and manage the interdependencies of the physical and financial supply chain.

USCIB members may register online for the event at a discount by entering the code USA-9262.

Staff contact: Eva Hampl

More on USCIB’s Banking Committee

Global Trade Set to Benefit From ICC Trade Register Report

Published on June 19, 2014

4762_image002It has long been anecdotally known that trade finance is a low risk for lenders. That claim now has a wealth of data to back it up. Today the International Chamber of Commerce (ICC) released its 2014 Trade Register Report, providing overwhelming evidence that trade and export finance – in all its forms – is a low risk bank financing technique.

The report supports ICC’s and USCIB’s advocacy of trade finance as a strong contribution to economic recovery and growth. Its findings hold the potential to alter attitudes towards trade finance, and therefore contribute to the growth of both global trade and the global economy.

The Trade Register also highlights a concern about the effect overly-stringent money laundering regulations have on trade finance flows. Strict regulations have damaged access of some firms to trade and export finance services.

“The intention of the Register was to progress the understanding of trade finance, its importance to global trade and its highly-effective risk mitigation capabilities,” explained Kah Chye Tan, Chair of ICC Banking Commission. “The impact of the Register, however, is much greater. As the latest results show, the Register provides concrete fact-based evidence that trade finance is low risk which, if fully reflected in capital requirements, would help banks to give companies the financing support they need for their exports, and to contribute even further to the global economy as it recovers from the global financial crisis.”

The report’s findings may help policymakers understand the negative consequences such laws have on export finance, which is crucial for economic growth in the developing world.

First launched in 2009 by ICC’s Banking Commission, the report is widely recognized as one of the world’s leading analytical reports on global risks for the trade finance industry—identifying risks across a range of trade finance products and markets.

Read more on the ICC website.

ICC Flags up Concerns Over Effect of Money-Laundering Laws (Financial Times)

Staff contact: Eva Hampl

More on USCIB’s Banking Committee

 

Bank Payment Obligation

Published on May 7, 2014

At its April 10 educational workshops, the NCBFAA, the National Customs House Brokers and Freight Forwarders Association of America hosted a session entitled “Bank Payment Obligations: An International Payment Option for Today’s World.”  Moderated by USCIB’s Cynthia Duncan, Hector Baltazar of J.P. Morgan Chase reported to the freight forwarding community on a third method for the payment settlement of an international transactions, namely bank payment obligations (BPO).

4722_image002As described by Baltazar, a BPO is a cross between a traditional letter of credit and the increasingly common open account. World trade is expected to rise by 8.7 percent by 2020 and it is predicted that open account, a payment method without agreed norms, will not practically serve all needs. Rather BPOs, which combines the agreed standards of letters of credit and the flexibility of open account payments, are becoming the increasingly popular alternative.

The International Chamber of Commerce (ICC), along with SWIFT (Society of Worldwide Interbank Financial Telecommunications) has recently authored The Uniform Rules for Bank Payment Obligations. More than 50 banks worldwide, including the Bank of America, HSBC, J.P. Morgan Chase and Citibankhave agreed to these BPO standards, supporting Baltazar’s contention the BPO will grow rapidly in the years to come.

Contact: Elizabeth Cafaro, USCIB
(212)703-5087 or ECafaro@uscib.org

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SMEs Face Significant Financing Gap

Published on July 22, 2013

Speaking at the World Trade Organization’s annual “aid-for-trade” review earlier this month, a representative of the International Chamber of Commerce (ICC) made a plea for added financing for cross-border trade.

ICC Senior Policy Manager Thierry Senechal said that trade finance intermediation is crucial today as it provides real-time risk mitigation, while improving liquidity and cash flow of the trading parties. It also gives localized small- and medium-sized enterprises much-needed access to credit and working capital to finance exports and imports.

Between 80 and 90 percent of global trade depends on some sort of trade finance, yet structural access issues, related to factors such as poorly-developed banking sectors or perceived country credit risk, continue to act as bottlenecks.

In remarks at the event, WTO Director General Pascal Lamy said: “Overcoming existing skills gaps in developing countries can help them draw enhanced benefits from their participation in the multilateral trading system. These discussions have brought some key areas into focus, including access to finance — and trade finance in particular.”

Click here to read more on ICC’s website.

Staff contact: Eva Hampl

More on USCIB’s Banking Committee

ICC names Donald Smith New Banking Commission Technical Advisor

ICC announced earlier this month the appointment of three new technical advisors for its Commission on Banking – a leading global policy and rule-making body for the banking industry known worldwide for its trade finance products and services including Uniform Customs and Practice for Documentary Credits, the most successful privately drafted rules for trade ever developed.

These  include Donald Smith, president of Global Trade Advisory Ltd.

Smith has over 40 years’ experience in international banking operations and trade product management. He has been responsible for international operations for 4 banks. He served as senior project manager for the ICC’s 2011 Basel III Default Registry project which documented the level of risk in trade transactions; chaired the US Delegation to the ICC Banking Commission from 1998 to 2009 and co-chaired the drafting group which produced the ICC’s first International Standard Banking Practices (ISBP) publication. He presently serves on several ICC Task Forces. Read more on ICC’s website.

Bank Guarantees in International Trade, 4th Edition

Published on July 10, 2013

Buy NowBy Roeland F. Bertrams
Order your copy now at our International Bookstore

Publication No. 975E
2013 Edition
Price : $300.00
ISBN: 978-92-8420185-3

As a comprehensive study of the legal and practical aspects of bank guarantees and standby letters of credit, this publication offers practitioners in international trade law the most complete analysis of banking law in the field.

In this new edition, the author uses case law, arbitral decisions, and legal writing from five European jurisdictions to build an analysis of how the practical applications of bank guarantees have established a pattern of law.  This remarkable book can be used in both civil and common law jurisdictions and it has been cited as an authoritative source of law in several jurisdictions from each system.

USCIB International Bookstore
Tel: 212-703-5066
E-mail: Bookstore@uscib.org
www.internationaltradebooks.org

Buy Now

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Uncertainty Hampering Trade Finance ICC Survey Shows

Published on July 9, 2013

4547_image002The International Chamber of Commerce’s 2013 survey on trade and finance, released in June, has found that a continued shortage of trade finance for international trade remains a major challenge for economic recovery and development, with many traders depending on overdraft and other corporate loans to finance exports and imports.

The proliferation of new regulations in recent years has increased cost pressure on financial institutions and depressed markets. Some 65% of surveyed experts said implementation of Basel III regulations is affecting the cost of funds and liquidity for trade finance. While many changes have already been implemented or proposed, the regulatory future remains unclear due to lack of harmonization, which remains a major problem for trade financiers and their clients.

The ICC survey positively indicates that despite uneven performance around the world in 2012, the market for trade finance does show signs of slow and steady growth, with temporary trade measures imposed during the financial crisis – including the rise in fees for trade –slowly being removed.

“This shows that financial intermediaries are continuing to satisfy the demand for financing and that investing in trade assets is part of a more sustainable model of banking, said Pascal Lamy, director general of the World Trade Organization, in the survey’s foreword.

Click here to read more on ICC’s website.

Staff contact: Eva Hampl

More on USCIB’s Banking Committee

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ICC Recognized for Trade Services

The ICC Banking Commission has won the Trade and Forfaiting Review
2013 Excellence Award for Best Non-Bank Trade Services Provider.

With 80 years of experience and more than 600 members in over 100 countries, the commission is ICC’s largest commission and has gained a reputation as the most authoritative voice in the field of trade finance.

The ICC Banking Commission rules and related services include rules and guidelines on documentary credits, UCP 600 – the most successful privately drafted rules for trade ever developed – and Bank Payment Obligation rules on supply chain finance.

The award follows the commission’s recent launch of new standards in the field of trade finance, including Uniform Rules for Forfaiting and Bank Payment Obligation and International Standard Banking Practice.  Both publications are available for purchase in the USCIB International Bookstore.

Click here to read more on ICC’s website.

Now Available in USCIB International Bookstore: Uniform Rules for Bank Payment Obligations

Published on June 13, 2013

4531_image002New York, N.Y., June 13, 2013 – Uniform Rules for Bank Payment Obligations (BPOs), a 21st-century standard in supply-chain finance that will facilitate international trade, is now available at the USCIB International Bookstore.

These new rules are set to revolutionize trade finance transactions. BPO is an irrevocable commitment made by one bank to another that payment will occur on a specified date after a specified event has taken place. It is an alternative instrument for trade settlement, designed to complement existing solutions, not to replace them.

The BPO provides the benefits of a letter of credit in an automated and secured environment, and enables banks to offer flexible risk mitigation and enhanced financing services to their corporate customers.

The rules were developed by the International Chamber of Commerce (ICC) Banking Commission, in partnership with the financial messaging provider SWIFT and take into account the expectations of all relevant industries and users. Reflecting consensus of the industry, the rules were unanimously adopted by the ICC Banking Commission in April.

“The importance of collaboration among the banking community is paramount today.” According to Michael Quinn, Co-Chair of the ICC URBPO Education Group, Chair of USCIB’s Banking Committee, and Managing Director of Global Trade at JP Morgan. Quinn went on to say, “we have case studies where banks are successfully using BPO in situations where there is high volume import, short shipment time periods and a need to provide liquidity to suppliers who are providing relatively low-cost retail consumer type goods.” Mr. Quinn also added, “this provides us with excellent examples of how BPO is being leveraged to facilitate trade without getting bogged down in the processing of documents.”

The speed of trade, the complexity of supply chains and the reliance on information and data today is overwhelming. Over the last 10 years banks and corporates have become focused on financing liquidity down supply chains to ensure products can get to customers. The financial crisis forced many companies to rethink their supply chain strategies and consider ways to ensure integrity down the chain while ensuring it remains liquid and appropriately protected. This, Quinn suggests, has led to a convergence of corporate needs for supply chain financing with banks’ need to support them in this and an ambition to reduce paper handling so that greater focus can be put on risk mitigation and financing.

The rules are set to go into effect on July 1. Order your copy today at USCIB International Bookstore.

About USCIB:
USCIB promotes open markets, competitiveness and innovation, sustainable development and corporate responsibility, supported by international engagement and regulatory coherence. Its members include U.S.-based global companies and professional services firms from every sector of our economy, with operations in every region of the world. With a unique global network encompassing leading international business organizations, including ICC, USCIB provides business views to policy makers and regulatory authorities worldwide, and works to facilitate international trade and investment. More at www.uscib.org.

USCIB’s Trade Services include: ATA Carnet, commonly known as the Merchandise Passport, which allows goods to enter over 85 customs territories tax- and duty-free for up to one year; eCertificates of Origin, fully electronic processing of Certificates of Origin, returned to you by e-mail, fast and complaint with ICC Guidelines for Certificates of Origin; and the USCIB International Bookstore, which enables customers to learn international business through unique titles covering a range of topics.

Contact:
Hsin-Ya Hou, USCIB International Bookstore
+1 212.703.5066, hyhou@uscib.org

USCIB International Bookstore

More on USCIB’s Trade Services 

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New Report Says Trade Finance Not to Be Feared

Published on April 16, 2013

4489_image001The International Chamber of Commerce (ICC) today issued Global Risks – Trade Finance 2013 providing a timely, accurate and comprehensive outlook on the risks in trade finance from the global trade finance industry’s perspective.

Based on data from ICC’s Trade Register, a comprehensive online database of over 15 million transactions provided by 21 banks, the new report shows that trade finance is a relatively low-risk asset class that should not be feared by financial institutions, nor over-regulated by governments.

In relation to comparable corporate default rates, the trade register data recorded a lower level of defaulted transactions adding weight to the hypothesis that trade finance transactions enjoy a lower than average likelihood of default. For medium- and long-term Export Credit Agency (ECA)-backed transactions, a similarly relative low risk is observed.

The ICC Trade Register contains data reflecting no less than 60-65% of traditional global trade finance activity, worth approximately US$2-2.5 trillion. Data reveals fewer than 1,800 defaults were made across close to 8.1 million short-term trade finance transactions. This equates to an approximate 0.02% default rate on a transaction basis. Consolidating the volume of trade and export finance and the likelihood of default for trade and export finance products, the ICC Trade Register is vital to crafting fair regulations necessary for a well-functioning global trading and banking system.

“The ICC Trade Register has been instrumental in fostering dialogue with regulators on a global scale. The integrity of the data is proven and is a strong incentive for other banks to participate,” said Pascal Lamy, director general of the World Trade Organization.

Kah Chye Tan, chair of the ICC Banking Commission and global head of trade and working capital at Barclays said: “I hope that by focusing on the critical connections between default levels in trade finance and the shaping of new regulatory recommendations, decision-makers will be able to engage collectively in efforts to improve the global financial system’s overall resilience.”

Read more, and download a copy of Global Risks – Trade Finance 2013, on the ICC website.

Staff contact: Eva Hampl

More on USCIB’s Banking and Trade Finance Committee