Is BAML retreating from trade and export finance?

A spate of high profile ECA and trade finance departures from Bank of America Merrill Lynch (BAML) has fuelled speculation that the bank is withdrawing from the business lines.

Comments (1)

  • William Laraque
    William Laraque, US-International Trade Services 29 July 2016

    The realization that trade services and cash management are part of a confluence of services centered on the cash flow needs and supply chain needs of a client have been in existence since I worked in the Worldwide Trade Services and Finance Group of Chemical Bank in 1982. Joint calls were made by cash management and trade finance officers to the point where we could fluently sell each others' products. There is nothing new about this concept. In any case, the conflation of these services is not the central issue involving global trade today. Much of global trade is migrating to e-commerce. Whereas telecom companies are taking the initiative to provide clients which are "underserved" by banks in such large areas as Sub-Saharan Africa, next to nothing has been done by banks to integrate e-commerce and trade finance systems in these areas. Banks have not withdrawn from this business, they were never in it. Pretending that e-commerce will only be used to transact small exchanges involving consumer goods is myopic. Walter Wriston, the then chairman of Citibank, said in 1976 that "in the future, all that banks will sell is information." The myopic definition of what constitutes trade or cross-border finance does not include e-commerce in the minds of trade finance bankers. They are too busy tossing around big concepts like blockchains and artificial intelligence. In my banking hay day we used words like arbitrage, cabotage and controlled disbursing to demonstrate our savvy at cocktail parties. It is obvious how impressed everyone was as a result. A bit of common sense would indicate that solving the entanglement of trade and e-commerce would provide strong sources of revenues for banks in a fast-growing area of global trade.

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