September 2019 issue contents
What Drives Bank-Intermediated Trade Finance? Evidence from Cross-Country Analysis

José María Serena Garraldaa and Garima Vasishthab


Several important policy questions raised by the drop in trade finance during the global financial crisis remain unsettled due to the lack of hard data on trade finance. This paper provides fresh empirical evidence on the determinants of bank-intermediated trade finance using a novel panel data set. Results indicate that trade finance is driven by demandside factors, such as a country's trade flows growth, and global import growth. In addition, trade finance is dependent on funding availability for domestic banks, as well as global financial conditions and dollar funding costs. These results are robust to different model specifications.

JEL Code: F14, F19.

Full article (PDF, 31 pages, 394 kb)

Bank for International Settlements
International Monetary Fund