Risk in Trade Finance

Objective

• Understand why trade finance is generally low risk for credit losses – IF done properly

• Appreciate the range of risks involved in trade finance

• Understand the controls and mitigants available

• Be able to categorise risk according to client size and strength

• Appreciate the mechanisms of the working capital cycle

• Recognise that structured lending facilitates easier and closer control

• Appreciate why some structured trade finance lines can sometimes enable the bank to assist a

  weak or extended balance sheet

• Understand why trade finance is considered high risk for AML

• Be able to see risks in the round

• Be much better equipped to assess, consider and support trade finance propositions based on a

  comprehensive understanding of the risks