In the immediate aftermath of the financial crisis, international trade suffered enormously. Even some of the biggest corporations could not obtain letters of credit for simple cross-border transactions, and exports were driven down by more than 10% in volume terms - the biggest contraction of its kind since the Second World War.
Much of the blame for this precipitous drop can be apportioned to broader economic woes, but the World Bank estimates that 10% to 15% was caused by a lack of available trade finance, which is behind as much as 90% of world trade. Despite the massive contraction in the need for trade finance, its availability retreated even further due to banks exiting the market as short-term trade obligations were liquidated in an effort to reduce their balance sheets. This shortfall reached between $100bn and $300bn in March 2009, according to World Trade Organisation (WTO) and World Bank estimates.
