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Trade Finance
Letter to the Editor
30 August 2001

Mr Jonathan Bell
The Editor
Trade Finance Magazine.

Dear Sir,

Michael Rowe's article on forfaiting (Simmering Quietly) in the July/August edition of your magazine examined the current state of the forfaiting market. It appeared that the conclusion reached by the participants quoted was that, although times were currently not easy, the next few years might well see a resurgence of activity and profitability.

Only one source, namely Celent Communications, voiced the possibility of significant growth and increased institutional interest over the next four or five years. Their case for this, it seems, rested upon a significant harmonisation in practice and a more transparent and widely available system of distribution than has hitherto existed. One wonders how quickly or easily this might be achieved?

Nevertheless, with the introduction of electronic trading it seems likely that familiarity and acceptability of standardisation will grow.

The article refers, somewhat obliquely, to the development of alternative forms of trading but was certainly not comprehensive in its coverage of the various initiatives underway. Nevertheless, it is clear that change is coming. However, in order to move the forfaiting market significantly towards the sort of potential growth forecast by Celent, a rather more distinctive and comprehensive initiative than is now apparent to the market overall will probably be required.

Yours faithfully,
R D Galpin
Chairman, Strategic Advisory Board,
Global Trade Finance Network™ (GTFNet).