Pre-€STR and Trade finance: Difference between pages

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''Interest rates - reference rates.''
:In any transaction, there is a level of risk for both the buyer and the seller. The buyer's primary concern is the quality and timing of the goods received. The seller, on the other hand, is mostly concerned about getting paid.


€STR is an acronym for Euro Short TErm Rate, whose formal publication began on 2 October 2019.
:In order to ensure that each party to a trade has their objectives met, and to avoid business grinding to a halt, a series of risk management tools have been developed to enable transactions to be settled in good order.


:These tools are referred to collectively as trade finance solutions, and the payment terms inherent in the various products provide more or less protection to one other party in the transaction.


Before €STR's formal publication, the European Central Bank (ECB) published preliminary figures, referred to as 'pre-€STR' for the period up to 1 October 2019.
::''Sarah Boyce, Associate Director of Education, ACT, The Treasurer, July 2015, p43''


Pre-€STR's aim was to reduce market uncertainty, allow market participants to assess the new rate and its statistical properties, and provide an opportunity to adjust processes and procedures to ensure transition to €STR.


Trade finance and international trade financing include the use of open account, export credit insurance, guarantees, [[supplier credit]]s, [[buyer credit]]s, and the use of different price bases and terms ('[[incoterms]]').


Pre-€STR was also sometimes written as 'Pre-ESTER', and €STR is similarly sometimes written as 'ESTER'.
Trade finance also incorporates instruments and [[documentary credit]]s such as letters of credit, [[acceptance]]s, bills, and evidentiary documents such as bills of lading.  


The scope of trade finance extends through domestic trade financing, [[supply chain finance]] and electronic systems, as well as the areas outlined above.


==See also==
* [[Benchmark]]
* [[Benchmarks Regulation]]
* [[EONIA]]
* [[€STR]]
* [[European Central Bank]]
* [[O/N]]
* [[Reference rate]]
* [[RFR]]
* [[Risk-free rates]]
* [[SONIA]]




==Other links==
== See also ==
* [https://www.ecb.europa.eu/paym/initiatives/interest_rate_benchmarks/shared/pdf/ecb.Pre-ESTER.en.pdf ECB Pre-ESTER]
* [[Bill]]
* [[Bill of lading]]
* [[BPO]]
* [[Buyer credit]]
* [[C2C]]
* [[CertICM]]
* [[CIF]]
* [[COD]]
* [[Documentary credit]]
* [[ECGD]]
* [[ECA]]
* [[FECMA]]
* [[ICTF]]
* [[Letter of credit]]
* [[Open account]]
* [[P2P]]
* [[Supplier credit]]
* [[Supply chain finance]]
* [[Trade acceptance]]
* [[UK Trade and Investment]]


[[Category:Accounting,_tax_and_regulation]]
 
[[Category:The_business_context]]
===Other link===
[[Category:Financial_products_and_markets]]
[http://voxeu.org/article/trade-finance-around-world Trade finance around the world, Centre for Economic and Policy Research, 2016]
 
[[Category:Trade_finance]]

Revision as of 15:24, 8 February 2017

In any transaction, there is a level of risk for both the buyer and the seller. The buyer's primary concern is the quality and timing of the goods received. The seller, on the other hand, is mostly concerned about getting paid.
In order to ensure that each party to a trade has their objectives met, and to avoid business grinding to a halt, a series of risk management tools have been developed to enable transactions to be settled in good order.
These tools are referred to collectively as trade finance solutions, and the payment terms inherent in the various products provide more or less protection to one other party in the transaction.
Sarah Boyce, Associate Director of Education, ACT, The Treasurer, July 2015, p43


Trade finance and international trade financing include the use of open account, export credit insurance, guarantees, supplier credits, buyer credits, and the use of different price bases and terms ('incoterms').

Trade finance also incorporates instruments and documentary credits such as letters of credit, acceptances, bills, and evidentiary documents such as bills of lading.

The scope of trade finance extends through domestic trade financing, supply chain finance and electronic systems, as well as the areas outlined above.


See also


Other link

Trade finance around the world, Centre for Economic and Policy Research, 2016