Lindsay graham not guilty vote growing3/20/2023 ![]() ![]() The sense one gets from The Big Picture charts is that at least some hopeful signs have emerged in developed-economy credit markets. Together, the United States and China expect that these efforts will generate total trade financing for up to $38 billion in exports over the next year. The program will be implemented in the form of direct loans, guarantees, or insurance to creditworthy banks. Most recently, to support exports of products from the United States and China to emerging economies, both countries decided on December 5 to provide a total of $20 billion through their export-import banks. The increase in this activity, the WTO reports, is being backed by governments of some of the world’s largest exporters, such as Germany and Japan. In the last 12 months, according to the WTO, export credit agencies have increased their business by more than 30 percent, with an acceleration since the summer. Though routine in normal times, the letter of credit of process is yet another example of how transactions between multiple financial intermediaries introduce counterparty risk and the potential for trouble when confidence flags. Letters of credit prove that a business is able to pay and allow exporters to load cargo for shipments with the assurance of being paid. Trade-related credit is issued primarily by banks via “letters of credit,” the purpose of which is to secure payment for the exporter. International trade amounts to about $14 trillion and, according to the World Trade Organization (WTO), 90 percent of these transactions involve trade financing. In case that list is not extensive enough for you, allow us to add one more item to the list: the condition of trade finance. A nice assist in this endeavor comes from the “ Credit Crisis Watch” at The Big Picture, which includes an extensive list of graphs summarizing ongoing conditions in credit markets. ![]()
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