TY - BOOK ID - 133754865 TI - Trade Finance in A Liquidity Crisis AU - Ellingsen, Tore AU - Vlachos, Jonas PY - 2009 PB - Washington, D.C., The World Bank, DB - UniCat KW - Access to Finance KW - Asymmetric information KW - Bank credit KW - Borrower KW - Contract enforcement KW - Credit market KW - Credit policies KW - Credit subsidies KW - Debt Markets KW - Economic Theory and Research KW - Emerging Markets KW - Finance and Financial Sector Development KW - Financial markets KW - Government interventions KW - International Bank KW - International Economics & Trade KW - International Trade KW - International transactions KW - Law and Development KW - Liquidity KW - Liquidity Crisis KW - Loan KW - Moral hazard KW - Private Sector Development KW - Trade credit KW - Trade Finance KW - Trade Law KW - Transaction UR - https://www.unicat.be/uniCat?func=search&query=sysid:133754865 AB - The paper discusses the reasons for supporting international trade finance during a liquidity crisis. Targeted interventions are justified when prices are rigid and sellers insist on immediate payment due to fears of strategic default. In this case, buyers who reject the seller's offer fail to internalize the seller's benefit from additional liquidity. A general infusion of credit will not facilitate the beneficial transaction, but an infusion targeted at the buyer's bank's trade finance supply will do so. Since there is a need for interventions in one country to benefit actors in another, international coordination is called for. ER -