International trade is the cornerstone to our modern economies, with the value of world merchandise trade valued by the World Trade Organization at US$19.67trn in 2018. Yet, despite its importance, its complex and vast scope means it remains somewhat arcane and often misunderstood by outsiders. Even for those within the industry, carrying out business across borders can be a tricky enterprise, with varying regulatory frameworks, cultural and linguistic barriers, and numerous risks to take into consideration. 

“This guide is an educational and informative tool for the whole industry, a back-to-basics guide on the critical components that form today’s trade finance landscape,” says Daniel Schmand, Global Head of Trade Finance and Lending, Deutsche Bank. 

Assembled by a cadre of seasoned trade finance professionals, the guide represents a reference point for current and future professionals working in the field. Covering the nuts and bolts of trade finance, the guide sheds light on everything from the rules and practices associated with traditional trade and supply chain finance to the growing interest in blockchain and sustainable trade finance, among other topics. 

Approach and structure 

The information is structured into twelve chapters, reflecting modern trade finance practices, which include chapters on:

• Transactional trade finance

• Supply chain finance

• Structured trade and commodity finance

• Structured trade and export finance, and export credit insurance

• Development finance

• Other forms of trade finance

• Foreign exchange (FX)

• Sustainable trade finance

• Digitalisation

• Financial crime

• Future of trade finance.

A good example of the approach and the level of detail is shown by the figure used to explain the trade settlement risk ladder in transactional trade finance:

Availability

The 37-page report is available, here. It is designed to act as a fundamental reference tool for anyone active in Trade Finance or entering this exciting and vital business.

“As a bank whose foundations were laid in international trade finance, we remain at the heart of the industry’s evolution and education today, as we celebrate our 150th anniversary,” says Daniel Schmand, Global Head of Trade Finance and Lending, Deutsche Bank. “And, with this in mind, we present this Guide to Trade Finance as an anniversary gift to the industry.”

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CTMfile take: This is a superb piece of work by Deutsche Bank. It really is a fundamental reference tool. Schmand and his team are to be congratulated.