Comprehensive data is vital to assess risk and make new policies in the US$16 trillion global trade and export finance market. The ICC Trade Register provides the essential empirical basis for discussions regarding the treatment of trade financing under the Basel framework—with the aim of ensuring essential trade products receive appropriate treatment by regulators.
When world trade collapsed during the global economic meltdown that began in 2008, trade and export finance suffered a consequent decline. The traditional role of trade and export finance as a low-risk asset class even came into question amid the turmoil in global financial markets. When regulators and bankers tried to assess the trade and export finance picture and its role during the crisis, timely, accurate and comprehensive data were lacking.
Because of its long tenure as a respected source of independent policy and market analysis, ICC is uniquely placed to supply up-to-date and all-inclusive data on trade and export finance to help the banking industry make sense of this fast-changing sector.
The demand for further data that can provide a complete portrait of the trade and export finance sector will only increase over the next 15 years, as global trade is poised to grow substantially. This need is made all the more urgent since a rebound in world trade is essential to propel the continued recovery of the global economy.
ICC established the ICC Trade Register to advance understanding of various products and their risk characteristics in trade and export finance. This initiative assists the industry, which draws on data from 25 international banks, in developing a pool of data to evaluate the long-held claim that trade and export finance is a relatively low-risk form of financing. It also provides a much-needed empirical basis for discussions regarding the treatment of trade financing under the Basel framework.
Knowing the volume of trade and export finance, and the likelihood of default for trade and export finance products, is vital to crafting fair regulations necessary for a well-functioning global trading and banking system.