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