Effects of destination countries financial development and public export credit guarantees on Spanish exports

This chapter examines the methods used to finance international trade. There are a variety of ways to pay for goods sold under an international sales contract. The method chosen for any particular transaction will depend in large part on the seller's confidence in the integrity and solvency of the overseas buyer, as well as on the bargaining strengths of the respective parties. A new payment method called the Bank Payment Obligation (BPO) makes it possible for the seller to mitigate the risks of non-payment and insolvency associated with open account transactions. This chapter discusses documentary bills, documentary credits, standby credits, performance bonds, and guarantees. It also considers other financing methods such as forfaiting and financial leasing before concluding with an overview of export credit guarantees.

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The role of a creditor in the making of a debt crisis: the French government's financial support for Poland, between cold war interests and economic constraints, 1958-1981

Financial History Review ◽

10.1017/s0968565019000222 ◽

2020 ◽

Vol 27 (1) ◽

pp. 73-94

Author(s):

Emmanuel Mourlon-Druol

Keyword(s):

Cold War ◽

Sovereign Debt ◽

Debt Crisis ◽

Export Credit ◽

Credit Guarantees ◽

Export Credit Guarantees ◽

Political Objective ◽

The Cold War ◽

Economic Constraints

In spite of considerable attention granted to sovereign debt failures, we still have limited knowledge of the incentives which induced creditors to lend at unsustainable levels. This article looks at the French government’s policy towards Poland from 1958, when economic cooperation between the two countries started, until Poland's announcement in 1981 that it could not service its debt. Export credit guarantees supported France's financial involvement, and this implied the government's strong influence on the decision to lend. This article brings out the tension between economic and political priorities in French policymaking during the cold war. Archival evidence reveals that as early as 1975 the French finance ministry warned that French risks were excessive; that Poland’s growing economic difficulties would render the country unable to repay its debts; and recommended limiting France's financial commitments. The French government, however, decided not only to carry on but also to increase lending, in order to support its political objective of using economic and financial means to relax East–West tensions. This article illustrates how creditors play a part in sovereign debt crises by voluntarily turning a blind eye to a country’s growing inability to repay its debts, and thus reinforce a vicious circle of indebtedness.

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Export Credit Guarantees and Export Performance: Evidence from Austrian Firm-level Data

World Economy ◽

10.1111/twec.12085 ◽

2013 ◽

Vol 36 (9) ◽

pp. 1115-1130 ◽

Cited By ~ 13

Author(s):

Harald Badinger ◽

Thomas Url

Keyword(s):

Export Performance ◽

Export Credit ◽

Firm Level ◽

Level Data ◽

Credit Guarantees ◽

Firm Level Data ◽

Export Credit Guarantees

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Mitigation of political risks in infrastructural project finance in African countries

10.47348/jccl/v6/i2a9 ◽

2020 ◽

Vol 6 (2) ◽

pp. 233-250

Author(s):

Olusegun Gbede ◽

Peter Kayode Oniemola

Keyword(s):

Risk Mitigation ◽

Project Finance ◽

Regulatory Regime ◽

Export Credit ◽

African Countries ◽

Political Risks ◽

Credit Guarantees ◽

The Government ◽

Export Credit Guarantees ◽

The Stability

Political risks have adversely affected project financing in African countries. There are instances of risks in the state hosting project that may negatively affect the bankability of the project. They include nationalisation of assets, spontaneous changes in laws and regulations by the government, wars, and terrorism etc. Investors require assurance to participate in project finance. Guarantee by the government on the stability of the polity is required. The government may also give assurances through legal measures, stabilisation clauses and guarantees to the effect that the regulatory environment of the project will be stable. This article examines infrastructural project finance in relation to political risks, with specific emphasis on African countries. Therefore, beyond assurance from the government, political risk mitigation instruments developed internationally can be employed. This article also elaborates the emergence of instruments/ mechanisms that have been developed internationally to mitigate political risks. These instruments include partial risk guarantees offered by international financial institutions, political insurance guarantees and export credit guarantees. It calls for the utilisation of these instruments and recommends that countries should tailor their regulatory regime to accommodate them. It contends that with the existence of these guarantees; the government has a role to play in creating a favourable legal regime and framework that will admit their utilisation within the legal system.

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