Trade Finance as a Risk Management Tool

Trade Finance as a Risk Management Tool

Aidan Applegarth

30 years: Commodity & trade finance

Within Trade Finance there is an inherent conflict between buyers and sellers in different locations. In this video, Aidan explores how effective risk management affords the transparency and ‘hands on’ engagement that facilitates diligent commercial lending.

Within Trade Finance there is an inherent conflict between buyers and sellers in different locations. In this video, Aidan explores how effective risk management affords the transparency and ‘hands on’ engagement that facilitates diligent commercial lending.

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Trade Finance as a Risk Management Tool

4 mins 34 secs

Overview

To understand the role of Trade Finance in managing risk, we need to appreciate the inherent conflict when buyers and sellers in different locations interact. This pivotal risk management role becomes an enabler for providing working capital, since it affords the transparency and ‘hands on’ engagement that facilitates diligent commercial lending. It means that potential problems may be spotted before they can cause harm, allowing protective steps to be taken. It is a key contributor to Trade Finance’s low default experience.

Key learning objectives:

  • Understand how trade finance is used in relationship to risk management

  • Know what trade finance means in regards to working capital

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Expert
Aidan Applegarth

Aidan Applegarth

Aidan spent some 30 years building up Trade and Commodity Finance (TCF) businesses for banks in the UK, Europe and Asia. He is now a consultant providing training and practical guidance to banks and other lenders wishing to develop a TCF proposition and also advises a number of Trade Finance funds on Credit and Operational Risk.

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