Reply To: What role do banks play in international trade?

[Eddie Philips]

Any commercial bank offers various services to businesses, capital markets and individuals. It is a financial institution where banking for international trade takes place frequently. However, contracts may be difficult to enforce in a few countries. A bank’s role in any international trade is to offer letters of credit to reduce risks and permit transactions to happen without hassle for sellers and buyers worldwide. The commercial bank is a neutral third party in most circumstances where it does not provide a letter of credit.