Insights on Trade Finance Risk Management from ITFA 2026 Conference

The annual International Trade and Forfaiting Association (ITFA) conference is a significant event for the secondary market community. The 52nd conference took place from September 9 to 11, 2026, in Split, Croatia, where brokers, insurers, and financial institutions congregated to discuss the distribution of trade finance risk across developed and emerging markets.

The 2026 event was marked by stock market volatility, supply shocks, and shifts in trade flows and deal types. A notable observation was the intense price compression resulting from the demand for favorable deals exceeding supply. Participants frequently remarked that “pricing is super tight” during both formal discussions and informal exchanges at the conference.

Insights from a panel focused on the distribution landscape in emerging markets (EMs) highlighted ongoing narratives regarding investor appetite for trade finance assets. This conversation was framed by a call to action from General Sir Patrick Sanders, Senior Strategic Adviser at Banco Santander and former UK Army Chief.

Differences in Emerging Market Risk

While there are no fundamental differences in the classification of risk between developed and emerging markets, understanding and accurately pricing this risk is essential. Vipin Vashishtha, Global Head of Trade Asset Sales & Syndications at Standard Chartered, noted that investors assess underlying credit and country risk in both markets. However, trade finance involves additional factors like transferability, legal enforceability, and transaction structure, the implications of which vary significantly by market. Vashishtha emphasized that clarity in breaking down risks for investors is crucial, as underwriting in EMs requires a broader understanding of the ecosystem beyond the borrower.

The regulatory and legal frameworks can also differ drastically depending on whether the corporate risk is booked onshore or offshore, impacting distribution challenges. The panelists noted that emerging markets are diverse; for instance, Vietnam operates under different circumstances than Egypt or Ecuador.

Profiles of Risk Participants

Boris Jaquet, Global Head of Distribution, Corporate Bank, Trade Finance, and Lending at Deutsche Bank, explained how distribution weighting varies among originating banks. Key risk-sharing participants include:

- Other commercial banks.

- The insurance sector, which is vital for facilitating many deals, providing single and portfolio solutions.

- Development finance institutions, focused on market entry and support in areas where traditional banks may be unable to participate.

- Larger institutional investors.

Jaquet pointed out that once an asset class is comprehensible to investors, pricing becomes the final hurdle for attracting interest. Misunderstandings about EM risk can deter participation, highlighting the importance of insightful engagement. Jack Robinson, from Bank ABC, shared that his institution's distribution strategies have evolved, with a shift from predominantly UK banks to increased reliance on insurance. He noted that insurance plays a critical role in managing capital structure and allows access to larger appetite within emerging markets.

Institutional Investor Involvement

Despite ongoing efforts by the ITFA Trade Finance Investment Ecosystem Working Group to facilitate risk transfers, institutional investors remain slow to engage with trade finance assets. Jonathan Lonsdale from Banco Santander remarked that, while some specialized funds exist, tapping into larger institutional investments is still a challenge. Jaquet added that while institutional investors are not direct replacements for banks or insurers, they play a valuable role in purchasing trade assets, re-packaging them, and making them accessible to their investor bases.

Discussions at the conference affirmed that creating portfolio solutions through methods like tranching is essential for making non-investable assets scalable and attractive to institutional investors.

Defense Financing Considerations

General Sir Patrick Sanders emphasized the necessity for increased European defense spending in his keynote address, framing it as part of a broader strategic reassessment of security needs rather than a response to current conflicts. The Deutsche Bank economics team highlighted the urgent financial requirements for enhancing military capabilities and infrastructure. Sanders outlined the role of private capital in facilitating these requirements, particularly where traditional financing faces barriers.

Jaquet noted that while some defense companies may not require financing, the oversubscription and competitive pricing of available deals indicate a market ripe for growth. The panelists acknowledged the need to connect sovereign demands with capital throughout the supply chain, particularly for SMEs that traditionally struggle to access financing.

Key Takeaways

Effective distribution partnerships and the right financial tools are critical for enhancing balance sheets in trade finance.

Significant opportunities exist in emerging markets, particularly along the right trade corridors.

Technology and robust platforms can streamline syndication processes and enhance transparency.

Current market volatility is reflected in pricing dynamics.

The integration of defense financing into trade finance presents both opportunities and challenges in liquidity management across supply chains.

The ITFA Conference serves as a vital platform for discussing these evolving dynamics in trade finance.