International Trade Finance from the Origins to the Present: Market Structures, Regulation and Governance

The Oxford Handbook of Institutions of International Economic Governance and Market Regulation, 2019

36 Pages Posted: 17 Oct 2019

See all articles by Olivier Accominotti

Olivier Accominotti

London School of Economics & Political Science (LSE); Centre for Economic Policy Research (CEPR)

Stefano Ugolini

University of Toulouse 1 - Laboratoire d'Etudes et de Recherches sur l'Économie, les Politiques et les Systèmes Sociaux (LEREPS)

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Date Written: April 8, 2019

Abstract

We describe how the structure and governance of international trade finance – the oldest domain of international finance – evolved from the Middle Ages until today. Trade finance products initially consisted of idiosyncratic assets issued by local merchants and bankers. The financing of international trade then became increasingly centralized and credit instruments were standardized through the diffusion of the local standards of consecutive leading trading centers (Antwerp, Amsterdam, London). This process of market centralization/product standardization culminated in the nineteenth century when London became the global center for international trade finance and the sterling bill of exchange emerged as the most widely used trade finance instrument. The structure of the trade finance market then evolved considerably following the First World War and disintegrated during the interwar de-globalization and Bretton Woods period. The reconstruction of global trade finance in the post-1970 period gave way to the decentralized market structure that prevails nowadays.

Keywords: trade finance, bill of exchange, market structure, governance

JEL Classification: F10, F32, F33, N23, N24, N73, N74

Suggested Citation

Accominotti, Olivier and Ugolini, Stefano, International Trade Finance from the Origins to the Present: Market Structures, Regulation and Governance (April 8, 2019). The Oxford Handbook of Institutions of International Economic Governance and Market Regulation, 2019, Available at SSRN: https://ssrn.com/abstract=3466109 or http://dx.doi.org/10.2139/ssrn.3466109

Olivier Accominotti (Contact Author)

London School of Economics & Political Science (LSE) ( email )

Economic History Department
Houghton Street
London, WC2A 2AE
United Kingdom

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Stefano Ugolini

University of Toulouse 1 - Laboratoire d'Etudes et de Recherches sur l'Économie, les Politiques et les Systèmes Sociaux (LEREPS) ( email )

21, Allée de Brienne
Toulouse, 31042
France

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