Managing International letters of credit transactions to limit credit risk

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Bergami, Roberto (2009) Managing International letters of credit transactions to limit credit risk. The Vindobona Journal of International Commercial Law and Arbitration, 13 (2). pp. 373-386. ISSN 1439-9741


As more than ‘90% of trade transactions involve some form of credit (in particular short-term) is the lifeline of trade’. Routinely, this finance is by way of short-term credit that ‘covers periods not more than 180 days’. It is commonly extended by the seller to the buyer and referred to as supplier’s credit. The extension of credit is not without risk. It is generally accepted that the management of credit risk is vital to the long term success of any firm. This is particularly so for international trade transactions, where foreign legal and regulatory systems, cultures and customs contribute to a changed business environment that may produce unexpected results. In such an environment, the issue of payment is at the core of credit risk management which is the main focus of this paper.

Item type Article
Subjects Historical > Faculty/School/Research Centre/Department > School of Economics and Finance
Historical > FOR Classification > 1402 Applied Economics
Historical > SEO Classification > 9103 International Trade
Keywords ResPubID17417. international trade, export finance, documentary credit, international trade finance, letters of credit, credit risk management
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