Losing Sleep Over the Sovereign Debt Situations in Europe and the USA?

By Ron Doyle

Are trade credit risk concerns keeping you awake? Are you feeling the stress from the sovereign debt situations around the globe? Well… you should be! 

Below are four ways in which debt crises can impact the creditworthiness of commercial buyers:

1. Bank liquidity is critical to the normal operational financing of companies. If bank liquidity tightens, the availability of financing becomes more restrictive, and if it is available, it becomes more expensive. In Europe the level of unsecured interbank lending has basically ground to a halt, according to David Oakley, correspondent for Capital Markets, in his July 3, 2011 FT.com article. 

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Economic uncertainty and countries “at risk” fuel nightmares for many in international trade

By Mark Attley

Over the last several weeks, Export Development Canada (EDC), Canada’s export credit agency has been presenting its Spring 2010 economic update to audiences across Canada.

Peter Hall, EDC’s Chief Economist, presents a complex topic in easy to understand terms – although I will let you be the judge of that, should you care to read the 132-page report. The report provides a Canadian perspective, along with insightful commentary and data on the global economy. While Peter is cautiously optimistic, he refers to five key risks, any one of which could derail the emerging global recovery.

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