The UK’s export credit agency (ECA) ECGD’s newly proposed foreign exchange credit support scheme has entered the preliminary discussion stage with a number of banks.

The ECA’s head of treasury division John Cross told an audience of bankers, exporters and GTR at a joint ECGD and British Exporter’s Association seminar in early May that the scheme is “still far from completion”.

Cross also elaborated on the terms of the new scheme, which were initially outlined in the UK government’s February trade and investment white paper.

Under the scheme, the ECGD will be sharing with banks the credit risk associated with hedging arrangements, such as forward foreign exchange contracts.

Cross made it very clear that the ECGD will not be assuming foreign exchange risk.

The product will be ancillary, meaning that it must be taken out alongside another ECGD scheme.

“The amount of cover ECGD can give will be related to the underlying contract,” Cross confirmed.

The ECGD has stated that more information will be released over the coming weeks.