10 July 2017

EBF supports the ICC trade register

The European Banking Federation would like to express its support to the International Chamber of Commerce’s Trade Register activity to underpin a data-based objective dialogue between regulatory authorities around the world and finance practitioners active in export and import.

In order to manage ‘Trade & Export Finance’ as a product effectively, banks need to understand the full risk profile by considering specific aspects relating to countries, currencies, counterparties, deliveries and credit risks of their business, as well as the regulatory and strategic implications. Trade & Export Finance is by nature a low risk profile business which supports export-oriented corporates, including small and medium-sized enterprises. It helps to safeguard employment in a volatile global environment. But to provide evidence on the beneficial impact of Trade & Export Finance empirical evidence also is required.

Since its creation in 2009  the ICC Trade Register helps banks achieve this by providing an objective, transparent view of the credit-related risks, defaults and characteristics of Trade & Export Finance using a customized data-driven approach. The medium and long term part of the ICC Trade Register ‎has also made transparent the value of risk mitigation as provided by export credit agencies and the substantial recoveries related to such business. The ICC Trade Register Reports published so far were therefore well received by the regulators and supported the various initiatives to reduce the negative impact of regulation on Trade & Export Finance.

The EBF is aware of some concerns raised regarding the continuation of the ICC Trade Register Project. It may happen that in the future the AnaCredit project can provide similar empirical information to the regulators but meanwhile the ICC Trade Register data date back to 2007 and provide a proven long track record over the crisis cycle. It will take a long time to set up a comparable track record under AnaCredit. Especially for businesses with a medium to long-term focus it will be a challenge to track over a longer period of time recoveries which arrive regularly years after the initial default. EBF strongly believes that the ICC Trade Register is and will be inevitable for the future discussion with the regulators. It is relevant and important to the business of trade, export & supply chain finance, and is central to advocacy efforts, dialogue and deliberations with regulatory authorities around the world.

Press release

© EBF