Table of Contents

Global Shock, Risks, and Asian Financial Reform

Global Shock, Risks, and Asian Financial Reform

Edited by Iwan J. Azis and Hyun S. Shin

The growth of financial markets has clearly outpaced the development of financial market regulations. With growing complexity in the world of finance and the resultant higher frequency of financial crises, all eyes have shifted toward the current inadequacy of financial regulation. This book expertly examines what this episode means for Asia’s financial sector and its stability, and what the implications will be for the region’s financial regulation. By focusing on legal and institutional frameworks the book also elaborates on various issues and challenges in terms of how financial liberalization can maximize the benefits and minimize the risks of crisis.

Chapter 18: Impact of the global financial crisis on trade finance in Asia and the cooperative effort to respond

Steven Beck

Subjects: economics and finance, asian economics, financial economics and regulation, money and banking


In the midst of the global financial crisis, Pascal Lamy, then head of the World Trade Organization, called a meeting of trade finance practitioners, the Trade Finance Expert Group, representing the world’s major commercial banks and all major multilateral development banks as well as the International Monetary Fund, the Berne Union (representing the global insurance industry) and the International Chamber of Commerce. It was a relatively intimate gathering of some 25 people. The context for the meeting in Geneva was grave. What began as a financial crisis – some opinion-makers questioned whether the financial crisis would significantly affect the general economy – had metamorphosed into a full blown economic crisis not seen since the great depression. International trade was in free fall from late 2008, with global merchandise exports dropping by 10 percent in the last quarter of 2008, compared with the last quarter of 2007, and by 22 percent in 2009, compared with 2008. Some questioned whether the international economic order as we knew it would survive. The mood was that grave. Mr Lamy’s purpose in convening a meeting at WTO headquarters was to ascertain what role, if any, a lack of trade finance might be playing in the precipitous drop in international trade; and if there was a role, what could be done about it.

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