Editor's foreword

Welcome to this month’s edition of Trade & Forfaiting Review. In this issue, we shall be looking at the ever-strengthening economy of Russia and some of the business being carried out on the structured pre-export finance side, where tenors have increased to as much as five years. But how long will this business be available for trade financiers, after all, it is natural to think that the larger Russian borrowers – notably the oil companies – will step up moves to diversify their funding sources to the bond markets.

Despite the relatively frail state of the Russian banking system, the beginnings of a re-emergence in syndicated bank-to-bank financings can be seen as financial institutions exploit the opportunities for business (in the absence of other more traditional markets) and good margins. However, while the number of banks currently registered in Russia is considerable, there is only a handful capable of attracting the attention of western banks.

Turning our focus to Austria, we ask whether the country is still recognised as a trade finance hub for major investment in Central and Eastern Europe (CEE). Bank Austria Creditanstalt argues the case, highlighting the integration of CEE into the European Union via trade. It also points out some of the differences between countries within the CEE region and how export credit agencies are aiding export business.

Finally, the International Forfaiting Association (IFA) held its 3^rd annual conference in September, which saw around 130 delegates converge on Dublin. As predicted last month, the IFA’s Market Practice Guidelines fuelled a considerable amount of debate, with several attendees making their feelings plain. Two of those delegates summarise their concerns in this issue.

If you would like to respond to the opinions expressed on the IFA Market Guidelines or on any other topic, please e-mail me at llaypang@ark-group.com

Features

The IFA Market Practice Guidelines: a new beginning? Free
Lucio Matassoni and Sean Edwards express their views about the IFA Market Practice Guidelines for the benefit of those who were unable to attend the recent IFA annual conference in Dublin.

The Russian economy: prospects and trends Free
There is no doubt that the Russian economy is performing well. Prospects at a macro level remain favourable prompting continued improvements in global market confidence. But as Paul Forrest explains, further progress is dependent on the reform process and economic reconstruction.

Back to Russia with love Free
Just a few years ago, Russia was perceived as the outcast of the global finance world. Today, trade financiers are clambering to return to the country to answer the call of borrowers demanding longer, cheaper and less structured deals. John Macnamara reports.

What's behind Russia's renewal? Free
In January 2002, Coface decided to increase Russia’s country @rating from C to B.[1] The reclassification reflects the improved conditions and qualitative gains observed in the Russian economy in 2001. Yet after a shaky, ten-year transition period, the country’s ‘awakening’ remains a difficult process. Yves Zlotowski explores what has really changed in Russia since the 1998 financial crisis, analysing the uncertainties that remain with regard to country risk.

Austria: still a gateway to CEE? Free
For years, the Iron Curtain was symbolic of how difficult it was to enter CEE. Trade financiers turned to Austria as the gateway to business in the region. But since the end of the Cold War and the potential for an increasing number of CEE countries to join the EU, has Austria become redundant?

There are lies, damned lies and statistics Free
The new Basel capital accord is intended to strengthen the global banking industry through the introduction of regulatory capital levels. But Stephen Kemp argues that figures make up only part of the picture, with other factors being of equal significance and consideration.

International transfers of personal data Free
Robert Bond explores the legal and compliance issues relating to trans-border data flows of personal data (with particular attention to transfers between the EU and US) and suggests a number of ways to comply with the law in Europe.

Regulars

Indicative forfaiting rates Free
Standard Bank provides indicative discount to yield rates including analysis for October 2002.

Margins tighten in Russia and Turkey Free
The LTP Trade Finance Index – the independent total return index covering the trade finance asset class – generated a strong result in August as credit margins tightened in Russia and Turkey.

Personal profile: Paul Simpson Free
Paul Simpson joined JPMorgan Chase as global head, trade services, in July last year. Since his arrival, his division has experienced an outstanding year, generating significant revenues for the bank, which is currently struggling as a result of volatile global financial markets.