Trade Finance

Introduction:

Interconnected flows of supplies, parts and finished goods around the world make trade finance a critical part of today’s global economy. Even small businesses like coffee shops or dress makers rely on different suppliers around the world to provide them with the inputs necessary for their daily business. Everyone from a small to multinational business now has the ability to sell internationally due to advances in worldwide logistics networks, internet-based sales and rapid global payment systems.

Despite all the innovative approaches to trading abroad becoming more accessible today, fundamental risks in the process still exist. This course introduces participants to the different trade finance products available to solve these issues, and to clarify the risks, benefits and challenges underlying each one.

Course Objectives and Outcomes:

• Understand domestic and international trade flows
• Identify the different parties and their roles in the buying and selling process
• Characterize the risks inherent to normal trade flows between foreign parties
• Appreciate how banks provide services and financing for both buyers and seller
• Distinguish various trade finance services available for different customer needs

Target Participants:

• New bank staff, experienced bank employees who want an introduction to international trade finance
• Bank lending product, credit, documentation and operations staff involved in the trade financing process who want to “see the rest of the picture”
• Purchasing managers, shipping brokers and international traders who deal with counterparties abroad
• Exporters who sell goods or services abroad
• Insurance company employees involved in trade insurance

Course Content:

Day 1: Introduction

• The “Normal” Buying and Selling Process
• Risks in the Normal Buying and Selling Process
• The “Normal” Financing Process
• Risks in the Normal Financing Process
• History of International Finance

Day 2: Group Work 1

• Role of the Banks in International Finance
• Non-Credit Banking Products and Services
• Group Work 2

Day 3: International Trade Flows and Terminology

• Credit-based Banking Products and Services – Imports
• Credit-based Banking Products and Services – Exports
• Group Work 3
• Recap of Basic International Trade Flows

Day 4: Recap of Banking Products – Credit and Non-Credit

• Letters of Credit – Types and Variations (Import)
• Other Non-Credit Banking Products and Services for International Trade
• Group Work 4
• Guarantees and Indemnities

Day 5: Supply Chain Finance

• Group Work 5
• QUIZ (Multiple Choice)
• Recap of International Trade Finance