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Reuters Thursday, October 9, 2008; 5:59 AM GENEVA (Reuters) - Business is booming in the trade finance market as exporters and importers return to a tried and tested form of credit amid the chaos of the financial crisis, bankers in the sector say. Demand for trade finance -- a traditional form of banking dating back to the Middle Ages -- is so strong that some houses say they are turning away business for lack of capacity. But if volumes are up, so is the price, with deals currently offered at 300 basis points over interbank refinancing rates, three times or more the going rate a year ago. And that is now making it hard for developing countries to finance their exports, with Brazil sounding the alarm. Some bankers also fear the high prices could eventually see new business dry up. "This has been a phenomenal year for trade... [read full story]
