Download in PDF format Date: 1 - 5 June, 2009 Time: please see Agenda Venue: World Bank Headquarters, 1818 H Street, N.W., Room MC C2-131, Washington, D.C. 20433, USA Course type: Global Face-to-Face Course Context: Because firms rely heavily on bank-financed trade credit to support their exports and imports, trade finance has long been an important component of international financial flows in support of trade. Thanks in part to rapid expansion of traditional sources of financing (both short and long terms), trade has been a critical factor in the significant gains made by developing countries over the past decades. The current global financial crisis threatens to significantly erode progress and global integration made in recent years. While until the 1997 Asian financial crisis trade finance used to be more resilient in period of financial stability, trade finance has become extremely sensitive to liquidity squeezes as shown in the current global financial crisis; with trade credit contractions worldwide being one of the earliest signs of the impact of the global credit crunch on trade credits and overall trade. As the life line of trade, trade financing provides fluidity and security to the movement of goods and services worldwide. Trade financing encompasses simple and traditional forms of credits, some dating back to the middle ages to enable exporters and importers to fund their shipments.  More than 90% of trade transactions involve some form of credit (mostly short term), insurance or guarantee. Although trade finance is one of the most secure modes of finance due in part to its short term maturity and other key factors (knowledge of the parties to each other and their bankers and loan against physical cargo funded), trade financing has been tightening following the ongoing global credit crunch. As is now well established from the financial crisis of several countries in recent times (Indonesia in 98, Brazil in 1999, Argentina in 2002, Turkey in 2001), a generalized credit crunch can affect imports and exports to the point of stoppage. The ongoing global financial crisis has impacted adversely on the ability of banks to offer trade credit in several ways: banks are overly cautious to lend due to capital constrain; borrowing cost have increased sharply; banks are reluctant to provide letters of credit to importers, resulting in the suffocation of normal trade; capital requirements under BASEL II are three times higher for emerging market credits than developed market borrowers. Because of shortage of funds, trade finance costs have soared and the costs of some deals are now more than six times what they were before the crisis. Against this background, the availability of trade finance and particularly short- term finance in periods of international crisis has become a matter of serious concern for developing countries’ trade policy makers and trading communities. Looking ahead, it is widely believed that contraction in trade credit will erode much of the trade progress made in developing countries in recent years with global trade projected to contract in 2009 for the first time since 1982; with exports and imports expected to be slowed considerably and many economies weakened. This course is offered by the World Bank Institute Poverty Reduction unit (WBIPR), and Finance and Private Sector unit (WBIFP) as part of their learning program to help countries understand the above challenges and possible mitigating policies. Objectives and Target Audience: The course is targeted at senior trade finance policy makers in developing countries’ government and private sectors, as well as their advisors, private sector operators/ exporters and export Industry associations, representatives of export support institutions (e.g. export credit agencies, Ex-Im banks, Central Banks), and researchers. The course aims at providing participants with useful insights and better understanding of: (i) Rationale for Proactive public policies in trade finance. Drawing from the lessons of experience of successful exporting countries, proactive public policies could be fulfilled in terms of assistance and support to export financing and development of efficient financial markets in order to attenuate/alleviate the lack of trade finance in developing countries. Possible proactive public policies could also contribute to trade expansion and facilitation, by mitigating market failures and information asymmetries in developing countries with poor financial markets. (ii) Trade finance markets –traditional and new tools used in both short term and long term in meeting the working capital and other needs of exporting companies. This could be achieved by providing a better understanding of trade financing instruments (e.g. Documentary Letters of Credit, Counter Trade, Factoring, Pre-Shipment and Post-Shipment Financing, Buyers’ and Suppliers’ Credits), as well as hands-on practical exercises on Export Credit Insurance (to protect exporters and mitigate the financial impact of risks on the exporter) and Export Credit Guarantees (to protect export financing banks from losses they may incur stemming from the provision of funds to exporters). (iii) Implications and impact of the global financial crisis on trade finance based on recent country experience and previous financial crisis. (iv) Necessary policy actions and possible roles at the national, regional and international levels to mitigate the impact of the global financial credit crunch on trade finance. Â
Course Fees: Participants from Least Developed Countries (LDCs) and International Development Association (IDA) countries will be assessed a $100 tuition fee. Participants from other   developing countries will be assessed a $200 fee, and participants from developed countries and donor agencies will be assessed a $400 fee.Â
Travel and Accommodation:Â Participants are expected to make their own individual travel and visa arrangements. WBI will provide assistance with hotel reservations near the Bank, but participants will be responsible for all accommodation and subsistence costs. WBI will also supply required information to U.S. consular offices abroad to facilitate visa applications.
A very limited number of sponsorships are available to cover costs of travel and accommodation for exceptional candidates from developing countries.
Application: Follow the link below to apply for the course:
Last day to Register is May 15th, 2009 Agenda: | Day 1 (June 1) - Trade Finance Constraints in the context of the Global Financial Crisis   | | 8:30 - 9:00 | Breakfast | | 9:00 - 9:15 | Opening remarks by WBI VP S. Pradhan Impact of the ongoing Global Financial Crisis on Trade Finance: Early Trade Policy responses. This session chaired by the International Trade Department/ PRMTR will provide an overview of the recent developments in trade finance and the global trade finance crisis and early policy responses from developed and developing countries. This session will be followed by a panel of major trade finance bankers in the US and representative of the US Bankers Association of Trade and Finance (BATF). Chair: Mona Haddad, Sector Manager, PRMTR Speakers: Donna Alexander, President BATF Michael F. Quinn, Managing Director, Global Trade Services, JPM Farhad Subjally, Director, Trade Finance, Standard Chartered BankÂ
| | 10:30 - 11:00 | Coffee Break | | 11:00 - 12:40 | Role of Trade Finance in Export Development/ Diversification and Growth This session will provide an overview of the rationale for trade finance at the firm level, as well as the role played by trade finance in international capital flows. How has trade finance been financed in the world and what are the differences between developed and developing countries? How did trade finance evolve over time at the firm level and at the macro/global level, and what are the prospects in the years ahead? Chair: Ms. Roumeen Islam, Manager, WBIPR Speakers: Yoon-shik Park, Professor, School of Business, George Washington University Ismail Dalla, Visiting Scholar, GEFRI, George Washington University and Lead Consultant, DECPGÂ
| | 12:40 - 1:40 | Luncheon | | 1:40 - 3:40 | The Impact of Global Financial Crisis on Trade Finance This session will assess the impact of the global economic crisis on access to trade finance and review how trade opportunities and policies are undercut by a variety of national and international problems including unstable capital flows, unsustainable foreign exchange indebtedness, and threat of recurring financial crisis and loss of confidence. Chair: Ms. Roumeen Islam, Manager, WBIPR Speakers: Mansoor Dailami, DEC Tom Dorsey, IMF Carmen Reinhart, Professor of Economics, School of Public Policy and Department of Economics, University of Maryland (tbc).Â
| | 3:40 - 4:00 | Coffee break | | 4:00 - 5:30 | Companies Seeking to Export: Dealing with Export Finance Constraints and Gaps on Export Finance markets This session will review the types of constraints faced by exporters in accessing trade financing as credit constraints faced by exporters hold back their ability to contribute to economic recovery and growth. These constraints include: basic exporter creditworthiness, infant industry type of constraints, insufficient understanding among exporters about financial management, underdeveloped and/or non-competitive financial systems, poor skills among trade finance intermediaries, insufficient market information/sources for evaluating exporter creditworthiness, buyer risk, the secured lending and bankruptcy regimes, monetary and financial sector supervisory and prudential policies, differences between national legal and market practices and internationally accepted conventions, norms and practices in export contracting and export financing, the presence of high levels of different types of lending risk in all or some part of the export cycle, low outreach, lack of trained bank officers, limited skills in financing new areas of exports, e.g. music, professional services, and now, commodities, bureaucratic and administrative delays, lack of full understanding on the part of exporters / banks, regarding the functioning of export finance schemes and availability of export credit, concessional rates on export credit, limited understanding of risks associated with exports including credit risk, market risk, commercial risk, liquidity risk, exchange risk, political risk, policy risk etc. Chair: Arvind Gupta, Lead Finance Specialist WBIFP Speaker: Lakshmipati Rao Viriyala, Professor of Economics, GITAM Institute of International Business (India) |
| Day 2 (June 2) - Trade Finance: Old and New Tools and Practical Country Cases  | | 8:30 - 9:00  | Breakfast | | 9:00 - 10:30 | Overview and Practical Cases of Old Trade Finance Tools This session will present and discuss the range of old trade finance tools from the simple documentary collection and documentary credit (letter of credit), to open accounts, Counter Trade, Pre-Shipping and Post-Shipping Financing, Buyers and Suppliers’ credits) will also be reviewed. Because trade finance has been recognized as one of the important parameters helping export development and diversification from the developing countries, the session will discuss successful cases of the use of trade finance tools and best practices to draw lessons for the developing countries in their export effort.  Given the need to focus on issues at the firm level, this session could also highlight: Main and special features of an export contract, export cash cycle, export profitability and export risks. What types of financing are required by firms to develop, execute and sustain an export sales strategy? How does trade finance fit in within the overall financial and financing structure of the firm? Business, operational and financial characteristics of exporters - special features of exporters in comparison to non-exporters. What are the properties of the main trade financing instruments in terms of purpose, benefits, cost, timing, risk, organizational and legal structures, product categories, etc?
Chair: Arvind Gupta, Lead Finance Specialist WBIFP Speaker:Margrith Lutschg-Emmenegger, President, FIMBANK plc, Malta, Global Trade Finance Company | | 10:30 - 10:40 | Coffee Break | | 10:40 - 12:40 | Overview and Practical Cases of New Trade Finance Tools This session will provide an overview of new types of Trade finance tools frequently used. (e.g., Factoring, Forfeiting, structured trade, commodity finance, and supply chain finance. Hands-on practical exercises on new trade finance tools, as well as Export Credit Insurance (to protect exporters and mitigate the financial impact of risks on the exporter) and Export Credit Guarantees (to protect export financing banks from losses that may occur from providing funds to exporters, will also be presented. Chair: Arvind Gupta, Lead Finance Specialist WBIFP Speaker:Margrith Lutschg-Emmenegger, President, FIMBANK plc, Malta, Global Trade Finance Company | | 12:40 - 1:40 | Luncheon  | | 1:40 - 3:40  | Overview and Practical Cases of New Trade Finance Tools
This session will continue with a presentation of new trade finance tools frequently used in meeting the working capital and other needs of exporting companies like pre- and post-shipments finance, structured trade and commodity finance, supply chain finance, and factoring and forfeiting. Speaker:Margrith Lutschg-Emmenegger, President, FIMBANK plc, Malta, Global Trade Finance Company | | 3:40 - 4:00 | Coffee break | | 4:00 - 5:30 | Practical Cases and Lessons of Experience of Successful Trade Finance Strategies in Developed Countries and Successful Emerging Economies The session will assess how trade finance tools are used in successful exporting countries, and draws lessons for export development and diversification effort of developing countries. The session will focus on hands on analysis and practical cases. The session will highlight measures to facilitate the financing of trade not only in times of crisis but also on necessary structural changes to enhance the efficiency of capital markets, diversify risks (i.e. risk sharing among ECAs, private insurers, and multilateral institutions) and improve the functioning of capital market structures for trade finance (i.e. development of country’s legal infrastructure, asset backed securitization funding structures to reduce reliance on international commercial banks for trade finance; increase use of domestic liquidity to fund trade finance). Chair: Arvind Gupta, Lead Finance Specialist WBIFP Speaker:Ricardo Coreces, World Bank Consultant
Sergio R. Saichin, Vice President, Treasury Services, JP Morgan |
 | Day 3 (June 3) - Trade Finance: Role Played by Institutions and Practical Policy Recommendations  | | 8:30 - 9:00 | Breakfast | | 9:00 - 10:30  | The role of Domestic Institutions (Export-Import Banks, Export Credit Insurance and guarantee organizations / ECAs/ Central Banks) Export development and diversification into new products and new markets have been recognized as essential for the developing countries. This requires efforts on several fronts, including trade finance. Institutions at the national, regional, and international levels assist the developing countries with trade finance. This session will discuss the role played by export credit agencies (ECAs), which comprise export-import banks and export credit insurance and guarantee organizations, and Central Banks. Chair: Arvind Gupta, Lead Finance Specialist WBIFP Speaker: Lakshmipati Rao Viriyala, Professor of Economics, GITAM Institute of International Business (India) | | 10:30 - 10:40 | Coffee Break | | 10:40 - 12:40 | The role of Regional and Multilateral Organizations in Trade Finance (AFDB, ADB, EBRD, Inter-American Development Bank (IDB), Islamic Development Bank (IsDB) This session will review the role played by Regional institutions – such as Asian Development Bank (ADB), African Development Bank (AFDB), European Bank for Reconstruction and Development (EBRD), Inter-American Development Bank (IDB), and Islamic Development Bank (IDB), as well as the role of multilateral institutions – such as World Bank, IFC, International Trade Centre (UNCTAD / WTO), UNCTAD, Berne Union and Prague Club, International Chamber of Commerce (ICC), and OECD. Speakers: | | 12:40 - 1:40 | Luncheon  | | 1:40 - 3:40  | Discussion panel with EX-IM Banks active in the Washington area (India, Korea, Japan, European EX-IM/ export support institutions (UK, Italy) and US EX-IM Bank) Speakers: John McAdams, Chief Operating Officer and Senior VP, Export Finance, US Exim (tbc) Steve Howlett, Senior Vice President, GE Capital Market Services Korea or Indian Ex-ImÂ
| | 3:40 - 4:00 | Coffee break | | 4:00 - 5:30 | How can Investors Mobilize Trade Finance in Low Income Countries to break into new geographic and products Mmarkets?  This session will summarize what investors could do in the context of the ongoing global financial crisis to secure trade financing. What are options available and the potential role of various stakeholders (private sector, domestic and international commercial banks, Central Banks, ECAs, etc…) Speaker: Michael Bickers, Managing Director of BCR Publishing Ltd, UK  | |  |  |
| Day 4 (June 4) - The Future of Trade Finance and Appropriate Policy Responses at the National, Regional, and International levels  | | 8:30 - 9:00 | Breakfast | | 9:00 - 10:30 | Boosting Availability of Trade Finance: WTO rules and Trade Financing This session will provide an overview of areas where WTO rules and frameworks can help improve trade financing in periods of crisis (e.g. supply of financial services as defined in the GATS, implications of the Agreement on Subsidies and countervailing measures for credits, guarantees and insurance provided by government or public bodies of export credits, insurance or guarantees, implications of WTO discussions on investments and trade credits).
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Speaker: Marc Auboin, WTO, Geneva | | 10:30 - 10:40 | Coffee Break | | 10:40 - 12:40 | Implications of the present Global Financial crisis on the Future of Trade Finance This session will summarize the impact of the ongoing global financial crisis and prospects on directions of trade finance based on a market study and analysis of trade finance practices in the Philippines, Indonesia, Vietnam, Cambodia and Lao PDR, as well as on-site trade appraisals conducted for banks in each of these countries. Speakers: Ricardo Coreces, World Bank Consultant John Ahearn, Managing Director, Citi Markets and Banking (tbc) Steve Tvardek, Director, Office of Trade Finance, Department of TreasuryÂ
| | 12:40 - 1:40  | Luncheon  | | 1:40 - 3:40 | Looking Forward: Lessons Learned from Previous Financial Crisis and Implication for Ongoing and Future Financial Crisis This session will draw lessons learned from preceding crises (The case of the 1997 Asian Financial crisis, Russia 11989-99 crisis, Brazil 1999, Turkey 2001, Argentina 2002) in dealing with disruptions of trade resulting from the drying up of trade finance during periods of financial crisis and Implications for ongoing and future financial crisis. These lessons include: macroeconomic adjustment policies, strength of domestic banking systems, support to pre- and post shipments export financing, role of key players, design of successful initiatives in term of timeliness, pricing, and flexibility. The session will overall focus on initiatives taken to deal with liquidity shortages, risks perceptions, confidence gaps and collective action problems and involving the private sector, governments, multilateral financial institutions, and official bilateral credit agencies. Speakers: Carmen Reinhart, Professor of Economics at the School of Public Policy and the Department of Economics at the University of Maryland (tbc) Michael Bickers, Managing Director of BCR Publishing Ltd, UKÂ
| | 3:40 - 4:00 | Coffee break | | 4:00 - 5:30 | Preparation of Country Cases and Lessons Learned by groups |
| Day 5 (June 5) - Presentations of Country Cases and Lessons Learned by Participants  | | 8:30 - 9:00 | Breakfast | | 9:00 - 10:30  | Presentation of Country Cases and Lessons Learned by all Participants in small groups - Part I (Africa, Latin America, Middle East) / with Q/A session, Feedback/ Inputs from Resource people/ Course presenters/ Moderators. Building on teaching materials covered during this course, this session will give the floor to participants organized in groups, to summarize how lessons learned in this course could be applied in their own countries. Speakers and Professors will be available to answer questions or clarify some policy recommendations. Speakers: Professor Carmen Reinhart, Mansoor Dailami Professor Lakshmipati Rao Viriyala, Margrith Lutschg-Emmenegger, Michael Bickers, Managing Director of BCR Publishing Ltd, UK Â
| | 10:30 - 10:40 | Coffee Break | | 10:40 - 12:40 | Presentation of Country Cases and Lessons Learned by all Participants in small groups - Part II (ECA, South Asia, East Asia)/ with Q/A session, Feedback/ Inputs from Resource people/ Course presenters/ Moderators. Building on teaching materials covered during this course, this session will give the floor to participants organized in groups, to summarize how lessons learned in this course could be applied in their own countries. Speakers and Professors will be available to answer questions or clarify some policy recommendations. Speakers: Carmen Reinhart, Professor, Mansoor Dailami Lakshmipati Rao Viriyala, Professor Margrith Lutschg-Emmenegger, Michael Bickers, Managing Director of BCR Publishing Ltd, UK Â
| | 12:40 - 2:40 | Luncheon/ Distribution of Certificates and End of Course Chair: S. Pradhan, WBI VP |
Course Staff: Director: Salomon Samen, PhD, Poverty Reduction and Economic Management,World Bank Institute        Coordinator: Raymond K. Boumbouya, Poverty Reduction and Economic Management, World Bank Institute Administrative Assistant: Vasumathi Rollakanty, Poverty Reduction and Economic
Management, World Bank Institute
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