The 40th annual assembly of the Latin American Federation of Banks (Felaban) took place in Rio de Janeiro on November 12, 13 and 14, 2006. Speakers included the president of BNDES, Demian Fiocca, and Felaban president Juan Antonio Nio.

BNDES’s Fiocca said challenges for infrastructure finance in the region are greater cost, longer terms and uncertain revenues stemming from conclusion risk. Challenges for export finance equal convertibility and country risks and competitors” long-term financing, especially on aircraft and civil construction, he added.

Fiocca commented that BNDES aims at less developed markets and the bank’s financing helps stabilise the Brazilian economy, smoothing private credit volatility. BNDES also finances long-term infrastructure in local currency.

Ken Stratton, managing director, transaction banking at Standard Chartered in New York, gave a thorough presentation on supply chain finance in emerging markets.

While the traditional letter of credit business is doing well, Stratton says 80% of international trade is on open account. Banks are countering this with regional hubbing and enhanced trade platforms, including the transition to paperless trade to address inefficient processing, he commented.

Carlos Perez, head, Americas group, global financial institutions and trade services at Wachovia Bank, addressed the audience on the aspects concerning correspondent banking in Latin America. Declining margins will force many out of the market, he predicted.

Peter Martin Thimme, director at DEG, a member of Germany’s KfW, elaborated on environmental risks management, including the Equator Principles II signed in June 2006 in London. DEG has offices in Sao Paulo and Mexico City.

Brazil’s external relations minister Celso Amorim commented on Brazil’s foreign policy, especially on South American integration. With Venezuela’s addition to Mercosur, he said, the bloc will have a much needed exit to the Caribbean.

Sao Paulo-based futures exchange BM&F, represented by director Isney Manoel Rodriguez, unveiled plans for a regional chamber to settle trade among Latin American nations in their own local currencies.