Global trade is expanding at an annual clip of 7%-9% but banks' involvement in the financing of the trade is decreasing. 50 years ago, letters of credit accounted for 80% of global trade finance, now they are less than 20%.
Banks are thus looking at how to reinvolve themselves with their clients' supply chains and so boost their role in global trade.
In Asia, the position is heightened because due to the inefficiencies in the system, banks still play a larger role in trade than they do in other parts of the world. But this just means they have even more to lose.
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