New WTO-IFC research finds that global financial volatility restricts trade finance availability, with the sharpest effects in emerging and developing economies.

Trade finance underpins international trade by mitigating payment, delivery and liquidity risks, yet unmet demand has been persistently large for at least a decade, equivalent to roughly 7-10% of global merchandise trade. Drawing on a new dataset from the International Chamber of Commerce covering more than 100 countries and over 20 global banks, WTO and IFC researchers found that a 1% increase in trade growth is associated with a 0.41% increase in bank-intermediated trade finance.

The study also finds that a one-point increase in the VIX index, a common measure of global uncertainty, is linked to a 3.3% decline in trade finance growth, with developing regions hit hardest — Asia-Pacific (-5.7%) and Africa (-5.5%) versus Europe (-0.7%). The authors call for policies that ease access during crisis episodes and strengthen local financial capacity over the longer term.