AVENUES FOR IMPROVING FOREIGN TRADE FINANCING INSTRUMENTS IN STRENGTHENING THE FINANCIAL SECURITY OF COMMERCIAL BANKS
Keywords:
commercial banks, financial security, foreign trade financing, trade finance, letter of credit, bank guarantee, export-import credit, factoring, forfeiting, currency risk, digital trade finance, compliance control.Abstract
This article examines the theoretical and practical aspects of the effective use of foreign trade financing instruments in strengthening the financial security of commercial banks. In the context of expanding foreign trade operations, the growing complexity of the international settlement system, currency exchange rate fluctuations, and increasing counterparty risks, instruments such as letters of credit, bank guarantees, export-import loans, factoring, forfeiting, and digital trade finance are becoming strategically important for banks. The article establishes that while foreign trade financing instruments diversify bank revenues, expand the client base, and support export-import activities, they also give rise to credit, currency, liquidity, documentary, operational, and concentration risks. Based on the research findings, the article proposes ways to strengthen the financial security of commercial banks, including diversifying foreign trade financing instruments, digitizing documentary operations, mitigating currency risks, monitoring off-balance sheet liabilities, and enhancing compliance control.
References
1. International Chamber of Commerce Academy. (2024). What is trade finance? An introductory guide. https://academy.iccwbo.org/international-trade/article/what-is-trade-finance/
2. Committee on the Global Financial System. (2014). Trade finance: Developments and issues (CGFS Papers No. 50). Bank for International Settlements. https://www.bis.org/publ/cgfs50.pdf
3. International Chamber of Commerce. (2007). Uniform Customs and Practice for Documentary Credits: UCP 600. ICC Publication No. 600.
4. International Chamber of Commerce. (2010). Uniform Rules for Demand Guarantees: URDG 758. ICC Publication No. 758.
5. Bank for International Settlements. (n.d.). Basel III: International regulatory framework for banks. https://www.bis.org/bcbs/basel3.htm
6. International Monetary Fund. (2019). Financial Soundness Indicators Compilation Guide. International Monetary Fund. https://www.imf.org/en/data/statistics/fsi-guide
7. World Trade Organization. (2016). Trade finance and SMEs: Bridging the gaps in provision. https://www.wto.org/english/res_e/booksp_e/tradefinsme_e.pdf
8. International Trade Administration. (n.d.). Trade Finance Guide. U.S. Department of Commerce. https://www.trade.gov/report/trade-finance-guide
9. International Chamber of Commerce Academy. (2025). Evolution of UCP 600 and its impact on documentary credits. https://academy.iccwbo.org/trade-finance/article/evolution-of-ucp-600-impact-on-documentary-credits/
10. World Bank Group. (2010). The ICC Uniform Rules for Demand Guarantees. https://ppp.worldbank.org/library/icc-uniform-rules-demand-guarantees
11. Akhmedov, F. Kh. (2018). Improving Foreign Trade Services of Commercial Banks in Uzbekistan [Abstract of PhD dissertation]. Banking and Finance Academy of the Republic of Uzbekistan.
12. Khudaynazarov, Sh. I. (2026). Improving the Practice of Financing the Exports of Business Entities [Abstract of PhD dissertation]. Denau Institute of Entrepreneurship and Pedagogy. https://api.ziyonet.uz/uploads/books/10000184/bczpD1F0vvpvwPX.pdf
13. Tashmukhamedova, Ya. A. (2025). THE INFLUENCE OF SOCIO-DEMOGRAPHIC FACTORS ON ENSURING THE ECONOMIC SECURITY OF THE COUNTRY. Innovation Science and Technology, 1 (10), 47-51.
Tashmukhamedova, Y. (2024). Transformation of Tax Administration in the Conditions of New Uzbekistan and Its Impact on Financial Security. Green Economy and Development, 4 (1), 668–670. https://yashil-iqtisodiyot-taraqqiyot.uz/journal/index.php/GED/article/view/8756
