Trade Finance in East Asia: Potential Responses to the Shortfall

20 Pages Posted: 31 May 2015 Last revised: 22 Jun 2015

See all articles by Ross P. Buckley

Ross P. Buckley

University of New South Wales (UNSW) - Faculty of Law

Douglas W. Arner

The University of Hong Kong - Faculty of Law

Rebecca Stanley

King & Wood Mallesons

Date Written: May 30, 2015

Abstract

The crisis of 2008 saw many European banks reduce their provision of trade finance in East Asia. Notwithstanding the actions of the Group of Twenty and other bodies to redress this, a substantial shortfall in trade finance facilities in the region remains. This article explores the development of this shortfall and analyses potential responses to it. These responses range from some much needed further revisions to the Basel III rules, to the deepening of cross-border cooperation, creating a ring-fenced liquidity pool for trade finance, encouraging co-financing among the various providers of trade finance both private and public and establishing a regional trade finance database. In addition, the article ponders the likelihood of China’s banks beginning to take a substantial role in providing trade finance to the region. Trade finance offers China’s banks a low risk means of expanding into international business and offers China a way to provide the sort of important service to its region that regional leaders typically seek to provide.

Keywords: 2008, GFC, Group of Twenty, trade finance, Basel III, China, East Asia

Suggested Citation

Buckley, Ross P. and Arner, Douglas W. and Stanley, Rebecca, Trade Finance in East Asia: Potential Responses to the Shortfall (May 30, 2015). Melbourne Journal of International Law, Vol. 15, 2014; UNSW Law Research Paper No. 2015-25; University of Hong Kong Faculty of Law Research Paper No. 2015/019. Available at SSRN: https://ssrn.com/abstract=2612414

Ross P. Buckley (Contact Author)

University of New South Wales (UNSW) - Faculty of Law ( email )

Sydney, New South Wales 2052
Australia

Douglas W. Arner

The University of Hong Kong - Faculty of Law ( email )

Pokfulam Road
Hong Kong, Hong Kong
China

HOME PAGE: http://hub.hku.hk/rp/rp01237

Rebecca Stanley

King & Wood Mallesons

20th Floor, East Tower, World Financial Center
1 Dongsanhuan Zhonglu
Beijing, Chaoyang District 100020
China

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