Study of Various Risks and Risk Mitigation  Methods in Trade Finance

Rashmi Soni

doi:https://doi.org/10.14445/23939125/IJEMS-V7I1P121

Research Article | Open Access

Volume 7 | Issue 1 | Year 2020 | Article Id. IJEMS-V7I1P121 | DOI : https://doi.org/10.14445/23939125/IJEMS-V7I1P121

Study of Various Risks and Risk Mitigation Methods in Trade Finance

Rashmi Soni

Citation :

Rashmi Soni, "Study of Various Risks and Risk Mitigation Methods in Trade Finance," International Journal of Economics and Management Studies, vol. 7, no. 1, pp. 164-171, 2020. Crossref, https://doi.org/10.14445/23939125/IJEMS-V7I1P121

Abstract

Although the global trade finance market was historically considered liquid and low-risk activity, following the stress period of 2008 and especially after the Lehman Bankruptcy, the sector appears to be undergoing a nascent structural change in their risk management process amidst various risks. Bank-intermediated trade finance performs two crucial roles: providing working capital tied to and in support of international trade transactions and providing means to reduce payment risk. Here, in this paper, various risks are analyzed, and the model has been provided to rationalize the mitigation of those risks after a thorough qualitative and quantitative study.

Keywords

Trade Finance, Risk mitigation, counterparty default

References

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