ICC Trade Register Report 2014 summary
This report, produced by the International Chamber of Commerce’s Banking Commission in collaboration with Oliver Wyman, presents a view of the risk profile of the Trade and Export Finance industry, globally.
The report is based upon a representative set of both Short and Medium to Long-term Trade and Export Finance transactions globally, contributed by 24 Trade and Export Finance banks (reflecting more than 4.5 million transactions totalling an exposure in excess of USD 2.4 trillion), and the analysis derived from that robust, objective data set.
The objectives of this report are:
• To provide an objective and transparent view of the risk profile and characteristics of Trade and Export Finance (Short, Medium and Long-term) using a rich base of industry data, with the intention of contributing to informed policy and regulatory decisions relative to Trade and Export Finance.
• To advance the understanding of Trade and Export Finance, its importance to global trade and the highly effective global risk mitigation capability of Trade and Export Finance products to a broad audience of interested parties.
• To promote understanding of the international regulations affecting bank capital requirements for Trade and Export Finance, and their history and objectives, in order to create a uniform global view of this industry as part of the Banking Commission’s commitment to effective and collaborative advocacy.
For this year’s report it was possible to make a significant step forward in achieving this objective:
• Probability of Default (PD) on an obligor level were reported and compared with transaction level default rates.
• Loss Given Default (LGD) figures per product group were calculated based on transaction level information.
• Insight into Exposure at Default (EAD) were increased through case study examples, such as a study showing product “lifecycle” data. This allows insight into process, recovery and payment activities in the life of a transaction. For EAD, the focus of next year’s study and build-out of the ICC Trade Register will be to move from case study examples to a statistically robust data set.