At ICC Austria’s Trade Finance Week, Trade Treasury Payments spoke with Ramadurai Krishnan, Chief Executive Officer of the Global Credit Data Consortium and former Chair of the ICC Trade Register, about the evolving role of the Trade Finance Registry in supporting low-risk treatment for trade products.
“The Trade Finance Registry… is the only unique source of information on trade finance products, covering letters of credit, trade loans, both export, import, supply chain and performance guarantees,” Krishnan said. “It has data collected over 20 years, consisting of information on exposures, transactions, and obligor-related information on these products in terms of defaults and losses.”
Originally established in response to Basel II requirements, the Registry has supported a series of regulatory adjustments for trade finance—many of which continue to influence prudential policy today.
“When Basel II came into play, the issue raised was trade finance transactions inherently are low risk, short term in nature,” said Krishnan. “But to prove this, we had to collect data and go back to the Basel committee in getting what is called the maturity floor waiver, getting what is called an exemption for the calculation of the leverage ratio, where contingent trade products like letters of credit and guarantees, credit conversion factors were applied rather than taking the nominal exposure at 100% CCF.”
He said, “We also subsequently used the data to get favourable… or appropriate treatment for trade finance under the liquidity coverage rules.”
Over time, the scope of products included has expanded. “We have expanded from the traditional trade products of letters of credit, trade loans and performance guarantees to supply chain loans,” said Krishnan. “It’s moved from having four or five banks to having about 12 banks. It’s a mature product.”
Still, there are gaps. “We need to do that to have the entire suite of trade finance products reported under the trade register,” Krishnan noted, referring to receivables finance. “Just be aware, receivable finance comes in many forms.”
When asked how the coverage of the registry could grow, Krishnan pointed to engagement and awareness: “We need to have a focused effort through all the ICC national committees in making clear to them that joining the trade registered data consortium is beneficial because it only establishes the fact that trade products are low default in nature.”
He cited recent gains: “Here I would reference what gain we got from the Prudential Regulation Authority under the Basel 3.1 regulations, where the data collected by the trade register with Global Credit Data Consortium and the International Chamber of Commerce was instrumental in getting the credit conversion factor down to 20%.”
“This also helped us to look at receivable finance separately in terms of maturity and keeping the maturity at 90 days.”
As the conversation drew to a close, the message was clear: evolving the Trade Finance Registry is key to maintaining risk-sensitive capital treatment for the industry’s most essential products.
Trade Treasury Payments (TTP) is the official media partner of ICC Austria’s Trade Finance Week.
Key Topics
- Trade finance data and transparency
- Basel regulatory treatment for trade products
- Risk sensitivity in capital rules
- Expansion of trade product coverage
- Engagement through ICC national committees
Key Insights
Expert Analysis
“The Trade Finance Registry is the only unique source of information on trade finance products, covering letters of credit, trade loans, both export, import, supply chain and performance guarantees. It has data collected over 20 years, consisting of information on exposures, transactions and obligor-related information on these products in terms of defaults and losses.”— Ramadurai Krishnan
Key Findings
- The Registry provides empirical proof that trade finance is low risk and short term.
- Basel reforms have been influenced by data submitted through the Registry.
- Recent Basel 3.1 outcomes reduced the credit conversion factor for trade exposures to 20 per cent.
- Supply chain finance is now covered, but receivables finance still requires inclusion.
Implications
- Reliable trade finance data strengthens regulatory advocacy and ensures proportional capital treatment.
- Broader participation in the Registry will close product-coverage gaps and enhance policy dialogue.
- Continued data collaboration supports risk-sensitive banking supervision for global trade.
- Expanding reporting to receivables finance will reinforce the low-default narrative across all trade instruments.
