GTR’s Q4 issue gives us the opportunity to delve deeper into the world of export and agency finance.
At the core of this publication is a report from our annual export finance roundtable, which was hosted in London, and which brought together a group of global and regional banking heads to discuss some of the more surprising market trends from the last year, the recent regulatory treatment of the business, and the scope for export credit agency flexibility.
We also had a chance to catch up with the ICC Global Export Finance Committee, the only industry body that represents banks active in export finance on a global basis, on a variety of topics, including their recent areas of focus, and their view on digitisation in this space – a “longer-term aspiration rather than a quick win”, we are told.
Elsewhere, we wrap our heads around what historic low OECD CIRRs could mean for the export finance market, and what a necessary reform of the rate might look like. In our Africa section we investigate the impact of rising Sub-Saharan African government debt levels – different in structure to previous crises – and set to remain high unless governments get better at collecting revenues. Our Americas section looks both south: at Latin America’s exporters’ efforts to make a mark on the global stage, and north: at attempts being made to extend US Exim’s charter, and the results of the bank’s new competitiveness report. Our regular corporate Q&A feature is with a Welsh industrial manufacturer who relies on export credit agency support to develop solutions for Ukraine’s Chernobyl site and Saudi’s Riyadh Metro.
In keeping with the overall theme of the year, macroeconomic and geopolitical uncertainty continue to cast a heavy shadow over markets as 2019 draws to a close. As this publication goes to press, China-US trade talks – the first high-level negotiations in more than two months – have resumed in Washington with a ‘phase one’ agreement reportedly having been reached.
In the Middle East, recent tensions between Iran and the West in the Strait of Hormuz are raising alarm bells for the region, particularly for companies working within oil and gas. Closer to home, in the UK, the government continues to try and finalise a deal with the EU, whether that be a hard Brexit, soft Brexit or no Brexit at all.
Although we haven’t yet seen the effect of these events on global export volumes, we have had a glimpse of increased competition amongst export credit agencies as they seek to promote their national interests, and been privy to more talk from the banks and agencies about product development in the export finance arena. It could be argued that the situation presents more opportunity than threat going forward for the export and agency finance community. “Anything that threatens the export finance model is a bit uncomfortable. But at the same time, we can’t deny that it has been responsible for a tremendous change in the business,” says one global head of export finance. We look forward to what 2020 will bring.