Trade Credit, Trade Finance, and the COVID-19 Crisis

9 Pages Posted: 13 Jan 2021

See all articles by Frédéric Boissay

Frédéric Boissay

Bank for International Settlements (BIS)

Nikhil Patel

Bank for International Settlements (BIS)

Hyun Song Shin

Bank for International Settlements (BIS)

Date Written: June 19, 2020

Abstract

As the COVID-19 pandemic hits economic activity, the vulnerabilities of longer and more geographically extended trade credit chains are coming to the fore, especially those related to international trade.

While risk mitigation is available from financial intermediaries, the bulk of the exposures associated with supply chains is borne by the participating firms themselves, through inter-firm credit.

Given the prevalence of the US dollar in trade financing, measures such as central bank swap lines that ease global dollar credit conditions may cushion the impact of the pandemic on global value chains.

Suggested Citation

Boissay, Frédéric and Patel, Nikhil and Shin, Hyun Song, Trade Credit, Trade Finance, and the COVID-19 Crisis (June 19, 2020). Available at SSRN: https://ssrn.com/abstract=3761890 or http://dx.doi.org/10.2139/ssrn.3761890

Frédéric Boissay

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

Nikhil Patel

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

Hyun Song Shin (Contact Author)

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

HOME PAGE: http://www.bis.org/author/hyun_song_shin.htm

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