Trade Finance in Crisis : Should Developing Countries Establish Export Credit Agencies?

New data on export insurance and guarantees suggest that publicly backed export credit agencies have played a role to prevent a complete drying up of trade finance markets during the current financial crisis. Given that export credit agencies are mainly located in advanced and emerging economies, the question arises whether developing countries that are not equipped with these agencies should establish their own agencies to support exporting firms and avoid trade finance shortages in times of crisis. This paper highlights a number of issues requiring attention in the decision whether to establish such specialized financial institutions. It concludes that developing countries should consider export credit agencies only when certain pre-requirements in terms of financial capacity, institutional capability, and governance are met.

Bibliographic Details

Main Authors:	Saborowski, Christian, Chauffour, Jean-Pierre, Soylemezoglu, Ahmet I.
Language:	English en_US
Published:	World Bank, Washington, DC 2010-01
Subjects:	ACCESS TO EXTERNAL FINANCE, ACCESS TO FINANCE, AMOUNT OF CREDIT, BALANCE OF PAYMENT, BALANCE SHEETS, BANK POLICY, BANKING ASSETS, BANKING SYSTEM, BANKING SYSTEMS, BENEFICIARIES, BORROWER, BORROWING, BROAD MONEY, CAPITAL LOANS, CAPITAL STOCK, CHAMBER OF COMMERCE, CODE OF CONDUCT, COLLATERAL, COMMERCIAL BANK, COMMERCIAL BANKING, COMMERCIAL BANKS, COMPETITIVE MARKETS, CORPORATE GOVERNANCE, CREDIT AGENCIES, CREDIT AGENCY, CREDIT ARRANGEMENTS, CREDIT AVAILABILITY, CREDIT CULTURE, CREDIT GUARANTEE, CREDIT POLICY, CREDIT RATINGS, CREDIT RISK, CREDIT RISKS, CREDIT SPREADS, CROSS-BORDER TRANSACTIONS, DEPOSITS, DEVELOPING COUNTRIES, DEVELOPING COUNTRY, DEVELOPMENT FINANCE, DEVELOPMENT FINANCE INSTITUTIONS, DIRECT CREDIT, DOMESTIC CREDIT, DOMESTIC ECONOMY, DOMESTIC MARKETS, ECONOMIC ACTIVITIES, ECONOMIC ACTIVITY, ECONOMIC CRISIS, ECONOMIC DEVELOPMENT, EMERGING ECONOMIES, EMERGING MARKETS, ENVIRONMENTAL EXTERNALITIES, EXPENDITURE, EXPORT BASE, EXPORT COMPETITIVENESS, EXPORT CREDIT, EXPORT CREDITS, EXPORT FINANCING, EXPORT MARKETS, EXPORT SECTOR, EXPORTER, EXPORTERS, EXPOSURE, EXTERNAL FINANCE, FINANCE INITIATIVE, FINANCE PRODUCTS, FINANCIAL CAPACITY, FINANCIAL CRISIS, FINANCIAL DEPTH, FINANCIAL INSTITUTION, FINANCIAL INSTITUTIONS, FINANCIAL INSTRUMENT, FINANCIAL MARKET, FINANCIAL MARKETS, FINANCIAL OBLIGATION, FINANCIAL PRODUCTS, FINANCIAL REGULATION, FINANCIAL RESOURCES, FINANCIAL SECTOR, FINANCIAL SYSTEM, FINANCIAL SYSTEMS, FLOWS OF CAPITAL, FOREIGN BUYER, FOREIGN COMPANY, FOREIGN TRADE, GLOBAL TRADE, GOOD GOVERNANCE, GOVERNANCE PRACTICES, GOVERNMENT INTERVENTION, GOVERNMENT INVOLVEMENT, GROWTH RATES, GUARANTEE SCHEME, GUARANTOR, INCOME, INCOME GROUPS, INDUSTRIAL COUNTRIES, INFORMATION ASYMMETRIES, INSTITUTIONAL CAPACITY, INSURANCE, INSURANCE INDUSTRY, INSURER, INSURERS, INTEREST RATE, INTEREST RATES, INTERNATIONAL BANK, INTERNATIONAL COMPETITION, INTERNATIONAL ECONOMICS, INTERNATIONAL LAW, INTERNATIONAL MARKETS, INTERNATIONAL TRADE, INVESTMENT FINANCE, ISSUANCE, LETTER OF CREDIT, LETTERS OF CREDIT, LIQUIDITY, LIQUIDITY CRISIS, LOAN, LONG-TERM FINANCE, LOW-INCOME COUNTRIES, LOW-INCOME ECONOMIES, MARKET FAILURE, MARKET FAILURES, MARKET PARTICIPANTS, MARKET REGULATION, MATURITIES, MATURITY, MIDDLE-INCOME COUNTRIES, MIDDLE-INCOME ECONOMIES, NATIONAL SECURITY, OPERATIONAL INDEPENDENCE, OUTSOURCING, PERFORMANCE BOND, PLEDGES, POLITICAL ECONOMY, POOL OF FUNDS, PORTFOLIOS, PRINCIPAL-AGENT PROBLEMS, PRIVATE BANKS, PRIVATE FINANCIAL INSTITUTIONS, PRIVATE MARKET, PRIVATE PARTIES, PRIVATE SECTOR CREDIT, PROBABILITY OF DEFAULT, PRUDENTIAL REGULATION, PUBLIC AGENCIES, REAL SECTOR, RECESSION, REGULATOR, REGULATORS, RESOURCE ALLOCATION, RISK MANAGEMENT, RISK MANAGEMENT TOOLS, RISK OF DEFAULT, RISK PREMIA, RULE OF LAW, RURAL CREDIT, RURAL CREDIT MARKETS, SAVINGS, SECONDARY MARKET, SOCIAL COST, SOVEREIGN DEBT, SOVEREIGN DEBT PROBLEMS, SPECIAL FINANCING, STATE GUARANTEES, STATE INTERVENTION, STRONG GOVERNANCE, SUPPLY OF CREDIT, SYSTEMIC RISK, TERM CREDIT, TRADE CREDIT, TRADE FINANCE, TRADE FINANCING, TRADE FLOWS, TRADE POLICIES, TRADE SECTORS, TRADING, TRADING SYSTEM, TRANSACTION, TREATY, UNDERWRITER, UNION, WORKING CAPITAL, WORLD ECONOMY, WORLD TRADE,
Online Access:	http://documents.worldbank.org/curated/en/2010/01/11604552/trade-finance-crisis-developing-countries-establish-export-credit-agencies https://hdl.handle.net/10986/19946
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