Investor Presentaiton
Appendix 6 Why trade matters: relevance and evolution of trade
1 The outlook for global trade
The $10tn case for trade¹
Open trade scenario:
■ +$10tn GDP in 2025 vs "Baseline"
☐
+$2tn trade in 2025 vs "Baseline"
G20 Merchandise Trade¹, $tn
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■ +$10tn trade in 2020-25 vs "Protectionism"
Projected Trade Value Output Delta
(cumulative 2020-2025)
Expanding the trade finance supply²
■ The correct capital treatment for trade finance would
release $1.2-2.4tn of additional supply²
■ The B20 has recommended the review of such treatment
to unlock this supply and drive financial inclusion
Global trade finance balances outstanding 2, $tn
•
•
Empirical default rates show low risk
nature of trade finance;
The correct treatment of trade finance
will free up c.30-45% of current capital
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10
Positive effect: + $4.7-$6.3
"Open trade"
4.1-5.3
"Baseline"
"Rising
protectionism"
1.2-2.4
2.9
Negative effect: $3.4-$4.9
5
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2019 global trade
finance balances
Viable new trade
finance supply
1.
2.
Potential trade
finance balances
Source: HSBC-BCG joint paper "The $10 trillion case for open trade", September 2020; sources: IMF World Economic Outlook; UN Com trade, OECD; HIS; WTO; IMF; BCG Trade Finance Model 2020;
BCG analysis
Source: Benchmark data from ICC Trade register 2019. Bank Pillar 3 data adjusted from 6 international banks' Pillar 3 reports
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