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From Kirsten Bischoff, Opalesque New York:

Of the $15tln flowing through world trade every year, approximately $10tln moves with the assistance of trade finance – short-term credit by banks and private lenders to importers and exporters. Throughout the past years as trade has increased and the number of bank lenders in this space has decreased a growing dislocation has taken hold of the market, exacerbated greatly by the credit crisis of the past year and a half.

So dire have the credit conditions in trade finance become that the fourth quarter of 2008 saw tradable goods pile up in portside warehouses, a situation that became newsworthy only when the shipping indices fell dramatically as inter-country trade came to a screeching halt around the world.

“We’ve been in the middle of the storm – not just the current crisis – but the general shortage of trade finance over the past twelve years or so,” says David Hu, managing partner of New York-based International Investment Group (IIG), an investment management firm that focuses on trade finance.

G20 moves to “grease the wheels” of world trade In advance of the G20 meeting last week, the World Trade Organization (WTO) and the World Bank reported predicted shortfalls in world trade financing with the WTO expecting a shortfall of $100bln and the World Bank looking as high as $250bln. The G20 meetings res......................

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