Trade & supply chain: Facing up to new challenges

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22 December 2011

Trade and supply chain finance is a sector undergoing fundamental changes. Oliver O’Connell reviews some of the market developments in 2011.

2011 was a turning point for transaction banking as a whole and this was more acute when one considers just trade finance. There has been a big shift as banks have tried to refocus on transaction banking under pressure from shareholders and regulators pushing institutions away from higher risk investment banking.

This was a year in which banks focused more than ever on innovating for clients and taking a step back to see if they are delivering. This was done against a backdrop of the advancing Basel regulatory agenda (see Trade Finance Magazine, November 2011, cover story) and how that will impact both clients and the institutions themselves. The impact on the business and its clients of the forthcoming regulatory changes are relatively aligned – what is bad for clients is bad for banks as it leads to instability and challenges the sustainability of the trade finance sector.

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