Liverpool is told by sponsor, Standard Chartered, to sign Asian football stars to take advantage of commercial deals. BBC Online
Posts Tagged ‘Standard Charterd’
I came across the following extract from a BBC Online article. The writer, “Laura” works in a British commercial bank.
If what she says applies in places like S’pore, HK, USA etc, we could see a second dip soon. Note after the collapse of Lehman, int’l trade almost stopped for a few months because banks stopped accepting letters of credit from banks that they thought could collapse.
“I have had a growing worry over international finance over the last few months. Since the crunch started, confidence in other banks has been knocked. The most obvious manifestation of this was LIBOR being thrown out of kilter. Whilst this has now settled it only shows the picture of banks operating in the UK. What can’t be seen easily is the reduction or extinction of the willingness of banks to accept letters of credit from foreign banks which many customers who export or who have sister companies abroad need to trade round the world.
‘There are some countries now which have no banks which UK organisations are happy to accept a letter of credit from. Letters of credit are, in simplistic terms, one bank saying our customer is good for the money. This letter says we guarantee that so please let them have the goods and pay after delivery. If your customer then doesn’t pay you, their bank has to honour the letter of credit they approved. If your bank doesn’t have faith that they would honour that then the whole system falls down. Which it virtually has.
‘This situation hasn’t notably improved for some countries and I think this is a real threat to economic growth to UK Plc next year, as low exchange rates should mean good times for exporters. If they can’t get funding, however they won’t be able to capitalise on this.”
But banks that have global networks and strong franchises in trade financing like HSBC (I got shares here), Citi (after US government bailout) and Standard Chartered are minting money.