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Zonder onderwerpscode: economie

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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.

Access to Finance --- Asymmetric information --- Bank credit --- Borrower --- Contract enforcement --- Credit market --- Credit policies --- Credit subsidies --- Debt Markets --- Economic Theory and Research --- Emerging Markets --- Finance and Financial Sector Development --- Financial markets --- Government interventions --- International Bank --- International Economics & Trade --- International Trade --- International transactions --- Law and Development --- Liquidity --- Liquidity Crisis --- Loan --- Moral hazard --- Private Sector Development --- Trade credit --- Trade Finance --- Trade Law --- Transaction

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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.

Access to Finance --- Asymmetric information --- Bank credit --- Borrower --- Contract enforcement --- Credit market --- Credit policies --- Credit subsidies --- Debt Markets --- Economic Theory and Research --- Emerging Markets --- Finance and Financial Sector Development --- Financial markets --- Government interventions --- International Bank --- International Economics & Trade --- International Trade --- International transactions --- Law and Development --- Liquidity --- Liquidity Crisis --- Loan --- Moral hazard --- Private Sector Development --- Trade credit --- Trade Finance --- Trade Law --- Transaction

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• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

Zonder onderwerpscode: economie

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• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)