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The Role of Private Equity in Trade Finance

Private equity firms are creating special purpose banks and starting to thrive while legacy banks falter. It will not be long before private equity which is heavily involved in financing cross-border trade, creates banks to finance this trade more efficiently and profitably.

The fines and embarrassment from violating export controls and tax laws have motivated some multinational banks to withdraw completely from trade finance.

As private equity firms step into the trade finance arena it is important for them to consider the critical role played by SWIFT and the ICC in creating order and providing discipline, trust and confidence in what would otherwise be just vulgar cross-border trading.