Trade Credit, Trade Finance, and the COVID-19 Crisis
9 Pages Posted: 13 Jan 2021
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: 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
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