Problems with “Letters of Credit” and international trade

International trade depends on “Letters of Credit”, or LCs. They finance shipments, but also assure the shipper he gets paid for the cargo sent. While LCs are very important for traders, they are not the favorite financial tool of the banks. Trade finance generate low profits usually, but it’s operationally intensive. Lately it has been harder to get LCs, accelerating the decline in international trade.
Here just a few examples from Bloomberg to illustrate the problems: Ream more »

