Business Leaders Press G-20 On Trade

London -- The International Chamber of Commerce urged the leaders of the G-20 countries to take steps to restore trade finance to normal levels following a collapse amid the deepening global financial crisis.

Trade credit has fallen by more than 40 percent in both volume and value over through 2008, according to a survey of international banks by the Paris-based ICC.

The survey of 122 banks in 59 countries found that between the final quarter of 2007 and the final quarter of 2008 banks cut the number of letters of credit issued to finance trade transactions by 57 percent while the value of the letters fell by 43 per cent.

"World trade depends heavily on trade credit, which has all but collapsed during the current financial crisis, effectively throttling the flow of goods," the ICC said.

ICC chairman Victor K Fung called on the leaders attending the G-20 summit in London tomorrow, April 2, led by U.S. President Obama, to adopt measures to restore trade financing to more normal levels.

The ICC's call for increased trade finance coincided with a forecast by the Organization for Economic Cooperation and Development that world trade will shrink by 13.2 percent in 2009.