Skip to comments.Trade finance drying up amid financial crisis
Posted on 12/17/2011 12:50:26 PM PST by george76
Trade finance is drying up amid the financial crisis, threatening jobs and economic growth, trade sources warned Saturday.
Banks like Credit Agricole and BNP Paribas -- two of the 25 financial institutions most active in such financing -- have recently reduced their trade financing business, said a trade source on the sidelines of a World Trade Organization ministerial conference.
More than 90 percent of commercial transactions in the world require such credit, but the current crisis is forcing banks to hold on to capital and liquidity, leading to the lending market drying up and making credit more expensive.
(Excerpt) Read more at breitbart.com ...
Th9s means our trade will benefit if letters of credit are landed here rather than Europe our manufacturers will benefit. This means banks unwilling to open Euro letters of credit to or from Europe will be denominated in US$ and trade outside the Euro realm will go on without them.
could it also lead to the euro being replaced with the dollar instead of the european countries reissuing their old currencies?
A Letter of Credit is usually issued in the currency of the seller of the goods, whatever that is.
Most large banks can do any currency.