Export finance and export credit insurance
The close ties between the German and the global economy are an important motor for our country’s economic growth and prosperity. German foreign trade in particular is a gauge of these ties. The private banks in Germany make available a variety of instruments to German companies for financing their export business.
However, in many countries the political and economic risks are so high that finance can only be provided if it enjoys additional government protection. The export credit guarantees (“Hermes cover”) and investment guarantees as well as the untied loan guarantees furnished by the German government perform this job. At the same time, it is important to ensure that the various instruments are continuously adapted to take account of the changing political and economic environment.
The economic and financial crisis created a need for more flexible instruments. While the measures adopted by the German government at the beginning of 2009 went in the right direction, they did not improve the situation significantly in all areas. The Association of German Banks therefore drafted in collaboration with the Federation of German Industries (BDI) a list of proposals on how the Hermes instruments could be made even more practical by means of tailor-made solutions. Several recommendations were adopted by the government in the course of 2010. The aim was, and still is, to respond to potential financing squeezes in the export sector at an early stage.
In addition, the Association of German Banks sought to ensure that the new capital and liquidity rules (Basel III), which are designed to stabilise the financial markets, are such that they do not seriously hamper trade and export finance. To draw attention to this issue, of which there is not yet enough awareness in the ongoing discussion, the Association of German Banks signed the Joint Industry Communication on Proposed Increased Cost of Trade Finance.