GENEVA Nov 12 The cost of some trade finance
deals is more than six times higher than a few months ago as the
global financial crisis bites into the sector that keeps
commerce moving, the head of the World Trade Organisation (WTO)
said on Wednesday.
Director-General Pascal Lamy said some operations that
charged a "spread" of 80 basis points, or 0.8 of a percentage
point, over bank refinancing rates a few months ago were now
charging 500 basis points, or five percentage points.
"That's the evidence of the imbalance in the market and the
tightness, including in liquidity," he told a briefing after a
meeting of trade finance experts to discuss the crisis.
Lamy said the market for trade finance -- which funds about
90 percent of the $14 trillion in world trade -- was lacking
about $25 billion of liquidity.
(Reporting by Jonathan Lynn; Editing by Andrew Dobbie)