A Decade in trade Cover feature

The last decade has seen trade finance catapulted into the spotlight. Trade finance practitioners have worked hard to keep pace with evolving customer expectations and an ever-changing regulatory environment. As the industry has grown, so has GTR’s coverage of the markets and sectors that matter most. This issue commemorates the publication’s 10th anniversary.


Trade professionals today find themselves in a dramatically different environment from what they experienced 10 years ago. The shake-up caused by the global financial crises over the years has left financial institutions and the corporates that they serve seeking new markets, new financing solutions and facing a new regulatory landscape.

As the world changes, so do the issues affecting trade and financing requirements. Some shifts, such as the movement of food supply and security to the top of the global agenda, and the development of African nations as well-established trading partners, may have been somewhat expected. But who would have predicted the resilience of the trade finance business to the waves of financial and economic shock? Who would have thought they’d see renowned banks exit the market?

It’s unclear if the key trends of the past decade can be expected to extend into the coming 10 years. But what is known is that the global crises have changed the dynamic of the global economy, resulting in new patterns of international trade.

Who better to give us a summary on the changes in the trade finance market over the last decade than the industry experts that have experienced them firsthand?


Dani Cotti, global head of trade at JP Morgan

Perhaps the most remarkable change over the past 10 years has been the dramatically increased attention paid to the foundational importance of world trade in the global economy – and trade finance’s critical support role. During the height of the financial crises, we were actually reading about trade finance on the front pages of major newspapers. Clients, governments, regulators, mainstream media – all have focused on trade with a sense of urgency – and that spotlight has given our business the opportunity to shine.

It has also driven us as an industry to accelerate our efforts to modernise, collaborate, standardise, and better leverage technology to maximise our reach and efficiency, and work with regulators to improve the soundness of our industry. These are all things we need to do to ensure trade finance is more scalable, efficient, and user-friendly for clients and investors. We are seeing more industry collaboration, with the International Chamber of Commerce, working on the ICC Trade Registry, forfaiting rules, BPO rules and Basel III issues, and the Global Trade Industry Council/Baft-IFSA, which is responsible for master risk participation agreements, product definitions, AML industry guidelines, and Basel III advocacy.

In trade finance, we have a very positive mission – our clients are large and small companies, governments, other financial institutions, and when we help them to succeed, we help to drive economic development, create growth, expand employment, and build cross-border relationships to facilitate the trade on which so many people around the world depend for their livelihoods.

To fulfil this mission, we will need a robust framework in which to operate, a relevant, practical product offering, and consistent, thoughtful deployment of this socially valuable service.

The industry requires external communication that reaches every corner and party involved in global trade and GTR is one of the major facilitators of that communication. The progress of GTR is impressive. I can remember 10 years ago, talking with what is now the GTR team when they were first considering founding the publication. The world has changed dramatically since then and it has been rewarding to see the group grow and thrive over time, and to evolve by adapting to the rise in importance of supply chain financing, a geographic shift to Asia, and the rise of export finance – and to stake its place in the market as a go-to source for trade news and industry discussion.


John MacNamara, global head of structured commodity trade finance, global transaction banking at Deutsche Bank

Can I say it’s been a decade of three halves? These days, when there is a Loan Market Association template for pre-export finance loans, it’s tempting to forget that a decade ago commodity-backed financings were still a minority sport in overall market terms.

In 2002 I remember being told that Russia had “peaked” because oil wasn’t going to go above US$25 per barrel. When Sonangol came out the following year with their first billion-dollar deal, there was a collective sharp intake of breath across the market.

By the time the commodity super-cycle had taken oil beyond US$100 per barrel in the second half of the decade, we entered that glorious period of the “super mega jumbo club” deals, as the other capital markets crashed around our ears.

However, the “third half” of the last decade has kicked in post the global financial crisis. The steady retreat of the traditional European commodity banks has, if anything, led to tighter structures for those who need to use them, although conversely many of the big commodity clients of a decade ago are now borrowing very comfortably on an unsecured basis. Also relevant is that there is much greater diversity of view on pricing, and many more banks decline deals not because they don’t like the credit or the structure, but because they can’t make the pricing due to internal hurdle rates.

So what do we see going forwards? Well, within the constraints that you have to be very brave to predict commodity prices, nevertheless I think we can say the need to finance working capital in commodities, whether you are a producer, trader or processor, hasn’t gone away, and even if prices are off the 2008 peak, they are still at levels of which no-one would have dared dream a decade ago. While there is still some distance to go before expectations for pricing balance out, there seems to be great interest among non-traditional investors to step into the gap left behind by banks.

Ultimately I remain optimistic. My first boss 30 years ago told me: “There will always be trade, so there will always be trade finance.” While the players, and even the rules, may change, the game looks set to go on and on.


John Ahearn, global head of trade at Citi

The combined forces of globalisation, consolidation and regulation are dramatically changing the nature of global trade but are also contributing to a very exciting time for our industry.

One of the most impacting changes in recent years is the flow of transactions in and out of emerging markets, as well as the flows within the emerging markets themselves. These changes have required us, as banks, to have a much deeper understanding of clients’ internal operating model, namely the inter-relationships of trade, treasury and working capital models, to support enhanced strategic dialogue. It has allowed us to deepen the ‘trusted advisor’ relationship. For clients, the convergence translates into centralised efficiencies, improved liquidity structures and forecasting and risk aggregation and mitigation.

With all of this, one component cannot be missed when discussing the trade landscape and that is the myriad of regulatory changes we continue to see taking place, and I would say, we will continue to see in the coming years. The most influential of these is Basel III, which is designed to improve the resilience of the banking sector, but which will have an impact on trade finance – including the proposed changes in capital requirements and the potential adverse effect on companies involved in the import/export business, particularly in emerging markets. Profound changes in global trade are also forcing financial institutions to reassess their trade finance business models. Many may have to alter their current risk diversification, operating and overarching partnership strategies in order to serve their clients in new trade markets.


Bruce Proctor, head of global trade and supply chain finance at Bank of America Merrill Lynch

The management of trade flows, whether at the regional, national or corporate level, continues to be of critical importance to the success of world economic performance. This cross-border activity has undergone tremendous change during the past decade, with the adoption of transformative technologies having a major impact on the industry.

Product development and delivery have been accelerated and dynamic new capabilities have been introduced to the market by various providers to address changes in client needs, advanced transactional financing requirements, and the implementation of broad regulatory frameworks. The specific involvement of the corporate sector in the day-to-day provision of trade services has been an important factor in the expansion of the overall market.


Peter Sargent, head of transaction banking, Europe at ANZ

GTR was launched in a completely different world, that of pre-global financial crisis. The events of 2007/08 and the crisis in confidence in financial institutions that these events precipitated has changed forever the way clients manage their money and transactional risks, the way they view banks, the manner in which banks are regulated and the underlying organisation and strategic approach to the market that banks adopt. Banks that we once took for granted have ceased to exist and we have seen a fundamental shift in economic power eastwards towards the growth markets of Asia and to a degree the Middle East.

Is this a bad thing? Well not entirely; banks have slimmed down their product offerings, prioritising those products that give low risk, annuity-based income and reducing or stopping altogether many investment or proprietary trading activities. All of these points have played into the hands of transaction bankers whose products absolutely fit the bill and which create much needed liquidity. At the same time the rise of web-enabled delivery channels has fundamentally changed the manner in which we deliver solutions and the manner in which we sell has moved on rapidly. It all amounts to a revolution in an industry that has been around for 300 years.

I cannot imagine what the next 10 years will bring but I suspect the merger of cash and trade, the role of online banking and the manner in which clients purchase our goods will look quite different quite quickly.


Tan Kah Chye, head of trade and working capital at Barclays

Time passes by quickly, but the last 10 years seem to have passed by even faster. The sub-prime crisis, sovereign debt, Basel III and economic double dips are all watershed points for the banking industry at which trade finance has emerged stronger and in vogue.

Never before have I seen so much young talent wanting to be a part of the trade finance business. And, never before have I seen so many veterans so proud to wear their trade finance badge. Students, bankers, academia, politicians, regulators and the media have all come to realise the importance of trade finance in supporting world trade and economic growth. We are living in the golden age of trade finance and it is a pleasure for me to have GTR as a partner in this journey.


Bonnie Galat, global head of financial institutions business development for trade and supply chain solutions at IFC

From my perspective, the degree and pace of global integration over the past decade has been a stunning development. It has generated completely new trade links and multi-directional flows which were beyond imagination in the previous decade when the legacy of colonialism and rigid geo-political blocs still drove the trade patterns. Reflective of this change is the phenomenal growth of south-south, south-north trade, and intra-regional trade, the pace of which far exceeded that of the traditional north-south corridors over the period. Though driven by the emergence of the Bric countries, growth extended to smaller and less developed economies as well, which became important players in the new value chains that were created. The entry of multilateral trade facilitation programmes over the past decade was a notable addition to the risk mitigation available to the industry as banks made deeper inroads into the new growth markets with which they were less familiar and needed credit support.

The IFC launched its global trade finance programme slightly over a decade ago with the goal of facilitating greater inclusion through access to trade finance for the non-Brics, firstly prioritising Sub-Saharan Africa and then other smaller economies across all regions, with a focus on private sector institutions with an SME reach.


John O’Mulloy, managing director of trade finance and forfaiting at Standard Bank

My strongest memory on this anniversary is talking to Rupert and Peter about how daft they were to think of opening a third trade finance magazine against big publishing houses [where they had previously been employed]. There is a long list of other things I got wrong over the last 10 years. I won the ‘deal gone bust most quickly award’ for some metal in Mexico, setting a new record of under 24 hours, and lost cattle in Egypt, cars in Kenya and football clubs and hotels. The Arab Spring, the withdrawal of the US from the Middle East, China’s export domination, the difficulty with Iran, were all unpredictable when GTR was launched but give us all opportunities for similar errors of business judgement.


Heinz Noeding, global head of structured export finance at Standard Chartered

Several changes in export finance have developed over the last few years that are expected to be even more pronounced going forward including: bank perception on owning ECA assets, the complexity of ECA-backed transactions, and an increasing focus on new emerging markets, regulatory changes and the higher cost of liquidity have diminished bank appetite for holding long-term ECA assets, while correspondingly driving the product towards adopting more ECA-wrapped bond structures.

Deal sizes and transaction structures are increasingly more reliant on project financing methods than corporate or sovereign-backed support, and as a result, banks utilise ECAs and related funding schemes as much for liquidity as for credit risk mitigation. Lastly, newly-maturing emerging markets such as Africa, parts of Latin America, the Middle East and Southeast Asia are becoming amongst the largest markets for ECA loans due to their extensive infrastructure, mining and oil and gas development opportunities, coupled with political and economic stability.


Denis Stas de Richelle, global head of export finance, Société Générale

Over the last decade, export credits in developing countries have not been popular, largely due their low risk-reward perception, as well as a lack of liquidity. However, in 2008 following the financial crisis, export credit agency financing re-emerged as an important tool in providing liquidity to the market and offering risk mitigation.

While strengthening the resilience of the banking sector and implementing new measures, the market has recently moved from a ‘take and hold’ practice to an ‘originate to distribute’ model, opening up the export credit system to new investors. Actively lobbying Basel III regulators, European banks are demonstrating that ECA-backed loans are high-quality liquidity assets with a low default rate. This long-term historical financing solution will most definitely enjoy a bright future.



June 2002
Exporta established by Peter Gubbins and Rupert Sayer
September 2002
The first issue of GTR, edited by Rupert Sayer, hits the market
February 2003
Exporta hosts its first-ever conference in Dubai
November 2004
Exporta’s first trade and export finance conference takes place in India
November 2005
The first Sub-Saharan trade and export finance conference is hosted in London
August 2007
Rebecca Spong joins as deputy editor and second member of GTR’s editorial staff
January 2008
Rebecca Spong becomes GTR editor
January 2009
Shannon Manders joins GTR as staff writer and is appointed deputy editor six months later
October 2009
Exporta’s first Asia trade and export finance conference takes place in Singapore
June 2010
Exporta Asia established in Singapore
June 2011
Laura Benitez joins GTR as reporter
September 2011
Exporta’s Asia trade and export finance conference becomes the world’s biggest trade finance conference
May 2012
Melodie Michel joins GTR as reporter
September 2012
Shannon Manders becomes GTR editor
October 2012
Finbarr Bermingham joins GTR as reporter



The GTR team has trawled through the first few issues of the magazine to review what experts were saying 10 years ago, and compare their thoughts to what we know to be true today.

“China remains the [Asia] region’s drawcard with activity increasing by the day,” a journalist reported from Hong Kong in 2002. Although a hard landing was to be expected at some point, few could have predicted how long China’s economy would flourish in the midst of the global economic freefall.

In 2002, GTR published a report by the trade finance arm of an Asian-based corporate who predicted that new participants to trade and structured finance will “expand their activities as niche players” in the market. This prediction has certainly rung true over the years as higher funding costs and liquidity shortages have indeed created new opportunities for new
market players.

A decade ago, GTR wrote that third-party software providers would have to work hard to make their products popular among banks, which would be developing their own solutions too. Since then, global banks have certainly become more focused on developing their own trade and supply chain financing solutions, while third-party platform providers have indeed found favour among mid-market banks.

“In Africa, the west coast is expected to become a very important market,” reported a banker back in 2003, who also highlighted East Africa as an important growth market. Both regions’ oil windfalls have since piqued the interest of international investors, and today there are few African countries that are not reasonably well known by the global trade finance communities. Nowadays, many of these countries are engaged in the trade of more than one commodity.


“I expect the currency markets to settle down (and maybe the UK will even join the euro at some stage),” foretold a UK exporter in 2002, who clearly could not have predicted the UK’s decision to opt out of the part of the Maastricht Treaty that would have made it mandatory to adopt the currency, or the coalition government’s 2010 decision to not join the euro for the lifetime of the parliament.

“One bright spot is Syria,” wrote a journalist in our first edition, clearly unaware of the country’s impending uprising, and the fact that sanctions would stop trade in its tracks.