Handbook of International Banking
Show Less

Handbook of International Banking

Edited by Andrew W. Mullineux and Victor Murinde

The Handbook of International Banking provides a clearly accessible source of reference material, covering the main developments that reveal how the internationalization and globalization of banking have developed over recent decades to the present, and analyses the creation of a new global financial architecture.
Buy Book in Print
Show Summary Details
You do not have access to this content

Chapter 11: The Settlement and Financing of International Trade

Ayse G. Eren


11. The settlement and financing of international trade Ayse G. Eren 1 INTRODUCTION International trade activities involve such issues as the exchange of goods and services, the activities of exporters and importers, international payments and exchange rates, and the role of international banking and finance. Exporters and importers tend to prevail on their banks to obtain for them the most cost-effective methods of payment and settlement. Banks and other financial institutions play an important role in identifying from the existing financial markets the most suitable instruments that could be used to finance international trade. Export financing, therefore, can be simply defined as a mechanism for financing export sales. On these grounds, the financing of international trade can be considered as an integral element of international banking (see Murinde, 1996, ch. 8). In general, international trade finance refers to the provision of bank credit facilities to meet a company’s borrowing needs in relation to its international trade activities. For example, international trade financing techniques can be used to bridge the funding gap between any credit provided in the trade contract and the need to finance stock and debtors. Historically, within commercial banks in the UK this funding gap has been financed by overdraft facilities. Furthermore, it is fully acknowledged that in many instances traditional internal working capital finance continues to offer a perfectly adequate solution to customers involved in international trade. However, a major advantage of trade finance products and techniques is the additional assurance which banks can...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information

or login to access all content.