Squeezes of trade finance have been among the factors responsible for the recent collapse of trade. Those squeezes should be seen in the context of an overall “introspection” of banking activities that has been sparked as an aftermath of the financial crisis. The prospects and strength of recovery in the global economy will depend on policy reactions to those issues.
1. Squeezes of global trade finance as a sign that this is no business (cycle) as usual
2. Emerging economies are especially affected by the banking introspection in course
3. Bounded capacity of response to squeezes in trade finance and banking introspection
4. Payments frictions as an oft-forgotten driver of the Great Depression