International Trade Finance From the Origins to the Present: Market Structures, Regulation, and Governance

Olivier Accominotti and Stefano Ugolini

No 13661, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We describe how the structure and governance of international trade finance – the oldest domain of international finance – evolved from the Middle Ages until today. Trade finance products initially consisted of idiosyncratic assets issued by local merchants and bankers. The financing of international trade then became increasingly centralized and credit instruments were standardized through the diffusion of the local standards of consecutive leading trading centers (Antwerp, Amsterdam, London). This process of market centralization/product standardization culminated in the nineteenth century when London became the global center for international trade finance and the sterling bill of exchange emerged as the most widely used trade finance instrument. The structure of the trade finance market then evolved considerably following the First World War and disintegrated during the interwar de-globalization and Bretton Woods period. The reconstruction of global trade finance in the post-1970 period gave way to the decentralized market structure that prevails nowadays.

Keywords: Trade finance; Market structure; Bill of exchange; Letter of credit (search for similar items in EconPapers)
JEL-codes: F1 F3 K12 N2 N7 (search for similar items in EconPapers)
Date: 2019-04
New Economics Papers: this item is included in nep-his, nep-int and nep-law
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Citations: View citations in EconPapers (4)

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Related works:
Working Paper: International Trade Finance from the Origins to the Present: Market Structures, Regulation and Governance (2025)
Working Paper: International Trade Finance from the Origins to the Present: Market Structures, Regulation and Governance (2020)
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