Trade credit, trade finance, and the Covid-19 Crisis

Frédéric Boissay, Nikhil Patel and Hyun Song Shin

No 24, BIS Bulletins from Bank for International Settlements

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.

Pages: 9 pages
Date: 2020-06-19
New Economics Papers: this item is included in nep-ifn
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Citations: View citations in EconPapers (22)

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