GTR quizzes the members of the ICC Global Export Finance Committee, made up of banks active in the export financing industry, about its objectives, key focus areas and views on the wider market.
GTR: What, broadly, is the remit of the ICC Global Export Finance Committee, and who’s involved?
The International Chamber of Commerce Global Export Finance Committee is part of the ICC Banking Commission and was set up in 2015 with the remit of serving as a globally representative body for banks active in export finance. We believe it’s the only industry body representing banks active in export finance on a global basis. Currently there are 16 member banks and we are keen to grow membership further. In terms of market representation, members currently include eight of the top 10 global banks in export finance and over 60% of market volume (based on the Dealogic 2018 league tables).
While of course it’s interesting that many of the top global banks active in export finance are members, it is very important to the ICC that membership is broad and diverse and members are equally welcomed from regional and national banks as well as global banks, and the list of members aims to reflect this. The unifying thread between members is their knowledge of the market and their commitment to the principles and mission of the ICC.
GTR: What are the committee’s objectives?
The objectives of the committee were set when it was first formed in 2015 and have recently been refreshed. The committee was formed as a reaction to the perceived need for a common approach for banks active in the export finance on regulatory matters and broad market changes. It had its origins in the efforts to add export finance to the ICC Trade Register (the global industry database of default and recovery rates for trade and export finance). As the Trade Register discussions for export finance evolved, it became clear that there was space in the market for a broad, global platform for banks active in export credit agency (ECA) finance to engage in discussion, advocacy and stakeholder engagement.
The objectives of the committee are:
- To create a credible discussion forum of export finance banking experts.
- To create a representative body to discuss industry matters with stakeholders such as the Berne Union (the industry body for credit insurers including ECAs), OECD, BIAC, International Working Group, WTO, Basel Committee regulators and regional regulators as well as regional and national banking organisations like the European Banking Federation (EBF).
- To advocate for and help develop improvements and efficiencies through standardisations and harmonisation of processes and regulations.
- One of the current strategic aims of the ICC Banking Commission is to deepen its engagement in longer-tenor structured capex finance in order to bridge the gap in the financing of infrastructure in the developing world and we feel that the ICC Global Export Finance Committee has an interesting and highly relevant role to play here. Partly in recognition of this aspiration, the chair of the committee, Jonathan Joseph-Horne of SMBC, has recently joined the ICC Banking Commission’s executive committee and will play a particular role in representing this segment, which in turn will help to raise the profile of medium and long-term export finance and related financing activities within the ICC.
GTR: What have been the key focus areas thus far?
Focus areas to date have included:
- Regulatory advocacy and engagement has been a core element of the committee’s activities from the start and continues today. Export finance operates in a world of changing regulation and the committee has a central role in undertaking regulatory advocacy where that is deemed necessary. One particular area of activity has been in investigating and addressing any unintended consequences arising from the application of relatively broad regulatory rules to the specific features of export finance. Well-documented examples of this would include the leverage ratio and, as a current topic, the area of provisioning for non-performing loans, in particular under CRR.
- Sustainability is another interesting area of considerable activity for the committee. We established a specific sustainability working group around a year ago and this group has made considerable effort and progress in engaging with stakeholders to essentially start a conversation about the role of sustainability in export finance. The enthusiasm and engagement seen on this topic to date have been fantastic and very much matches the importance and relevance of this topic to the broader market. The most recent highlight was a joint Berne Union and ICC sustainability workshop held in London in September over a day and half and attended by 75 banks, ECAs, corporates and lawyers, who came together to discuss what sustainability means for stakeholders in export finance and how they could better work together in order to reach the UN’s Sustainable Development Goals. It is hoped that this will be the first of many such events.
- Stakeholder engagement is a very important focus for the committee and takes on many forms. As already mentioned, engagement for regulatory advocacy is a critical area of priority and one where the committee has a strong role to play. Equally important is engagement with stakeholders such as the Berne Union and regular meetings take place between the committee and the Berne Union’s medium & long-term committee. This engagement under a spirit of partnership and information sharing is strongly valued by the committee and is one of its core aims. Other highly valued stakeholder engagements take place with bodies as diverse as the OECD and BIAC, the IWG, the EBF, the LMA and other committees within the ICC Banking Commission such as the Trade Register and the sustainability committee. We often find considerable overlap in our discussions with these stakeholder groups which is perfectly logical and reflects the inter-dependencies we all see on a daily basis in the export finance world.
In terms of upcoming focus, we anticipate IBOR transition being increasingly important as the need to transition to risk free rates rapidly approaches. Digitalisation is a huge topic for the trade finance industry generally and perhaps export finance is slightly late to this party. We also continue to focus on both expanding and diversifying our committee membership and very much welcome interest from prospective members.
GTR: In terms of relevant market happenings, what is the committee’s view on the OECD Consensus rule changes and the work of the IWG? Can we expect a more level playing field for ECAs going forward?
This is a really interesting topic. The OECD Consensus is now over 40 years old and there seems to be a universal acceptance that it would benefit from a refresh. The ICC Global Export Finance Committee shares this view and is seeking to articulate its views on this alongside other stakeholders. The work of the IWG is relevant here and potentially exciting given the breadth of its membership. It is currently unclear whether the IWG will act mainly as one of the catalysts for change in the OECD Consensus or will become a genuine alternative (or complement) in its own right, but certainly we welcome the broad debate that is currently taking place on the modernisation of the OECD Arrangement and the role that the IWG could play across OECD and non-OECD ECAs. This type of engagement is fully aligned with the broad objectives of the ICC and the committee as outlined.
GTR: What is the committee’s view on digitisation in the export finance arena? Is it an achievable goal in the short term?
In the short term, digitalisation and the fintech industry is probably more relevant to trade finance than export finance, but we do see longer-term applicability especially for the SME sector where there is a need to close trade finance gaps through low cost, simple processes to access the benefits of ECA finance. The ECA product importantly and successfully supports entire supply chains from multinational lead contractors through to SME sub-contractors but there is undoubtedly more that could be done to make the product more accessible to the SME segment. It is a longer-term aspiration rather than a quick win, but we envisage a key role for digitalisation in improving the cost effective accessibility of export finance for SMEs.
Meet the ICC Global Export Finance Committee:
- Jonathan Joseph-Horne, SMBC (committee chair)
- Olivier Paul, ICC
- David Bischof, ICC
- Henri d’Ambrieres, HDA Conseil
- Paul Richards, ANZ
- Yasser Henda, BNP Paribas
- Andre Gazal, Credit Agricole
- Ahmet Bekce, Citibank
- Kathrin Eich, Commerzbank
- Werner Schmidt, Deutsche Bank
- Ralph Lerch, DZ Bank
- Richard Hodder, HSBC
- Michiel de Vries, ING
- Chris Mitman, Investec
- Clarine Stenfert, JP Morgan
- Olwyn Buldhoo, MUFG
- Eric Hoffmann, Santander
- Faruq Muhammad, Standard Chartered
- Francesca Beomonte, UniCredit