These are some strange times. Look, we have $16 trillion of negative yielding bonds, that’s T, for trillion. I’m asked by non-financial people why anyone would want to buy negative yields (you pay to hold them, btw) and I reply, it’s not about income, it’s about trading that rates will fall further.
Which got me thinking: If we are in some liquidity trap world and negative interest rate environment, what does that do to all these invoice financial models being built using the latest and greatest in artificial intelligence and machine learning?
The Fallacy of Non-Recourse Invoice Finance
In life it is important to distinguish between marketing and reality. When it comes to invoice finance, one marketing myth that has persisted is that non-recourse invoice finance shifts payment risk from seller to funder. Unfortunately, non-recourse factoring is one of the most misunderstood subjects in commercial lending. As a result, companies undertaking some form of invoice finance, receivable finance or factoring tend to have the wrong expectation about this product, potentially incurring unnecessary costs and not truly understanding the credit-risk relationship.
Vessel Tracking Technology Making Trade Finance Transparent
Trade Financing Matters welcomes this post from Byron Mckinney, Product Manager – Trade Finance, Accuity In the twelve months from January to December 2017, over […]
Trade Finance – Why Banks argue this Product Suite is “Special”
Banks continue to sell Trade Finance as a great product line and one that is getting unduly punished by regulators. Their argument centers on a […]
3 Reasons Banks’ Trade Finance Business all Chase the Same Deals
Global Finance Magazine wrote an article the other day saying a greater supply of capital and a dip in demand are strangling the trade finance […]
Banks Start Exiting Trade Finance
It used to be no bank would consider exiting the trade finance business. This was a classic product set and studies by consultants found that […]
The Rise (and Rise) of Supplier Networks: The Comet Coming?
Trade Financing Matters - Free White Paper Download
The world of trade finance has traditionally been served by the documentary letter of credit for hundreds of years. The associated management of risk and financing services has hitherto been the exclusive domain of the financial services industry, comprising both banks and to some extent specialist non-bank financial institutions. As we enter 2015, it is increasingly clear that as in other areas of financial services, the business of trade finance is exposed to the competitive threat of non-traditional service providers, including those in the financial technology sector who are well positioned to take advantage of new supply chain logistics and other trade-related platforms through the provision of new products and services underpinned by new business models. Find out what the future has in store with this free, new downloadable piece of research from Trade Financing Matters.
Options to Buy Trade Finance and Trade Credit Assets are Growing – Part I
Bank’s have been looking to distribute trade finance assets off their books for a number of years because their equity has become increasingly expensive, especially […]
Deutsche Bank focuses on Working Capital with new Global Solutions unit
Recently, Deutsche Bank created a global solutions function within their trade finance/cash management for corporate (TF/CMC) business as part of their global transaction banking division. […]
Trade Credit versus Trade Finance – Is there a difference?
This is a confusing area and unfortunately many in the industry use these terms interchangeably. As the Bank for International Settlements describes in their paper […]