The CBI has supported a B20, the Business at OECD (BIAC) and the International Organisation of Employers joint paper on improving access to trade finance, which has a critical role to play in helping businesses realise their export ambitions and go for growth.
What is the B20?
The Business Twenty (B20) is the official business community engagement forum for the Group of Twenty (G20) advanced economies. As the voice of the private sector to the G20, the B20 represents the global business community across all G20 member states and all economic sectors. This paper developed under the Italian B20 Presidency will therefore lay a valuable foundation to promote policy development in this important area.
What does the paper say?
The paper proposes three recommendations to improve access to trade finance, building on the concept of a Global Value Chain (GVC) passport to help SMEs developed under the B20 Saudi Arabia Presidency last year:
- Promote the Legal Entity Identifier (LEI) as a worldwide unique identifier standard to facilitate more effective counterparty identification and verification on a global scale
- Legally recognise digital documentation to allow for a greater use of digital documents in trade finance processes, helping to reduce friction, as well as monetary and environmental costs
- Leverage digital technologies by establishing well-defined security principles and minimum requirements to make digital platforms trusted ecosystems for Global Value Chains (GVCs) implemented consistently across jurisdictions.
Gianluca Riccio, Managing Director, Lloyds Banking Group, a CBI representative at BIAC and Vice Chair of Business at OECD Finance Committee, was the lead author on the paper and said that “the proposed actions can deliver benefits on their own, but their combination could significantly facilitate access to trade finance, and so support private sector activities to foster trade and boost growth; it can generate a positive flywheel effect for the economy.”
It is hoped these proposals will help support cross-border trade and help more businesses to access trade finance and go for growth finance. The CBI remains in active dialogue with the UK government and UK Export Finance on these concepts, working with financial services firms, specialist trade associations and businesses across the whole economy to further this agenda.
The full paper can be accessed here.