JPMorgan and ADB Expand Risk Pact to Further Facilitate Trade in Asia
JPMorgan and the Asian Development Bank (ADB) have signed the Credit Guarantee Agreement (CGA) under ADB’s Trade Finance Facilitation Programme (TFFP) to further enhance support for international trade in developing countries in Asia. The expanded partnership is designed to stimulate trade growth by extending trade financing to JPMorgan’s financial institution clients in emerging markets. Combined with the Risk Participation Agreement signed last year with ADB, this collaboration will enable JPMorgan to expand risk coverage in additional markets such Indonesia, Nepal and the Philippines.
“We are pleased to further broaden our partnership with ADB to help bolster trade flows to a wider range of Asian countries recovering from recent market instability,” said Yanti Agustin, Asia-Pacific head of global trade services, JPMorgan Treasury Services. “As a pioneering member of ABD’s Trade Finance Facilitation Programme, we will continue to build upon our entrenched relationships with financial institutions in Asia-Pacific by leveraging this important program to help our clients raise important trade financing.”
Under the CGA, ADB provides guarantees to confirming banks like JPMorgan covering country risk, as well as risk on issuing banks’ letters of credit (LCs) and other instruments in support of trade. Through the credit guarantee, ADB shares risk with confirming banks to provide comfort to exporting companies that they will in fact get paid for shipments to the most challenging Asian markets.