DC Insight

As reported in the lead story and the following story in this issue, the trade finance market is not out of the woods yet from the letdown it suffered during the financial crisis. While in some regions the market is picking up - though not yet to pre-crisis levels - in others it's still declining. As long as this situation prevails, we'll stay with this story.

Among other features in this issue, we're pleased to have an "Expert commentary" from Gary Collyer, Technical Adviser to the ICC Banking Commission. Gary always has something interesting to say, and here he makes a plea that the publication on international standard banking practice (ISBP) be revised. Gary bases his reasoning on several contentions, perhaps the most important of which is that the latest ISBP needs filling out with new material covering "transferable credits, revolving and reinstatement credits, instalment credits, assignment of proceeds and even back-to-back credits". Shortly after you read his article, we'll know if the Banking Commission agrees with him.

Getting back to the subject of the recession and trade finance, this issue also contains an article by John Dolan concerning whether the strict compliance rule will be abused in a falling market, in his words whether "buyers or their bankers might be tempted to invoke the strict rule in bad faith in order to avoid market loss". An intriguing question and one that John explores in considerable depth.

This issue also offers an interesting "Documentary dialogue" between two Chinese writers, Kenny Wang and Ofei, on whether and when the confirming bank is a nominated bank. This is apparently a hot issue in China, since our two writers originally submitted their articles independently of one another, and only later turned the two into a documentary dialogue. As you'll see on reading the article, the two agree on certain points, but take issue on others.