ECONOMICS | |||||
Bachelor | TR-NQF-HE: Level 6 | QF-EHEA: First Cycle | EQF-LLL: Level 6 |
Course Code | Course Name | Semester | Theoretical | Practical | Credit | ECTS |
IB4613 | The New Trends and Techniques in International Trade Finance | Fall | 3 | 0 | 3 | 6 |
This catalog is for information purposes. Course status is determined by the relevant department at the beginning of semester. |
Language of instruction: | English |
Type of course: | Non-Departmental Elective |
Course Level: | Bachelor’s Degree (First Cycle) |
Mode of Delivery: | |
Course Coordinator : | Prof. Dr. ELA ÜNLER |
Course Lecturer(s): |
Instructor SELDA EKE |
Recommended Optional Program Components: | The Handbook of International Trade and Finance, The Complete Guide for International Sales, Finance, Shipping and Administration by Anders Grath,Dec.28,2013 |
Course Objectives: | Enabling the students who would work in financial services industry or in manufacturing industry or in foreign trade industry to learn the basic trade finance concepts and instruments applicable in international trade activities with a risk management approach and to make them aware of the current trends so that they could assess the changing landscape of trade finance markets. |
The students who have succeeded in this course; The students who have succeeded in this course; 1. Understand the main risks in international trade, mainly credit risk and the methods to manage this risk. 2.Learn some basic trade finance concepts and the role of the banks in trade finance from the perspective of covering companies' financial needs. 3.Have a general understanding of trade finance markets and learn about the products of different financial institutions. 4.Learn how banking products would help to finance the working capital needs of the companies in conducting their trade activities. 5.Learn the importance of delivery terms in managing delivery risks in international trade . 6. Understand how different payment methods would impose risks to the parties in international trade and how these risks are managed. 7. Understand how different payment terms would be used to manage credit risk and that would be used to obtain finance for the parties in international trade . 8. Understand the alternative finance methods in addition to bank finance. 9. Understand the role of insurance in conducting international trade activities, especially how credit risks are managed through insurance and the market for it . ( i.e export credit insurance) 10.Enhance their understanding to judge the need to move from traditional trade finance to supply chain finance and the main products in supply chain finance . 11. Explore the trade finance solutions and apply their learnings to trade activities. 12. Use media techniques ( zoom, teams etc.) effectively to share their views and to create an active collaboration with their friends and the lecturer throughout the presentations in the virtual classrooms and online discussion forums . |
Introduction :An overview of the developments in the world trade in the context of risk management Definition of various risks in international trade and the concept of trade finance : Product risks, manufacturing risks, transport risks, commercial risks, political risks, business risks, financial risks ( market risks, credit risks and liquidty risks) Preshipment and postshipment risks and financing needs Working capital finance and trade finance Terms of delivery and main documents in international trade : Major delivery terms Main documents used in international trade activities Policy as a payment instrument Terms of payment : Open account ( cash against goods) , documentary collection ( cash against documents ) and letter of credit ( types of L/C) Bonds and guarantees : Common forms of guarantees (contract guarantees, payment and credit guarantees) Standby letters of credit Guarantees used in trade activities Surety Some cases and applications Mid -term Credit insurance :Export credit insurance The private sector and public sector applications, products Export credit agencies ( ECAs) Investment risks ( Political risk insurance) Application and case study Trade finance alternatives I :Supplier credits Refinancing of supplier credits Invoice discounting Export factoring Buyer credits Trade finance alternatives II :Forfaiting International leasing, cross border leasing,export leasing" Supply chain finance :Definition of supply chain and risks in supply chain Bank Payment Pbligations (BPO) Structured trade finance :Receivables finance vs traditional payment instruments Asset backed securitization ( ABS) Commodity finance Currency risk management :Spot and forward transactions Futures markets and transactions Currency risk management :Futures Option contracts Evaluation of the course content :Cases and applications |
Week | Subject | Related Preparation |
1) | 1)Introduction :An overview of the developments in the world trade in the context of risk management | |
2) | 2)Definition of various risks in international trade and the concept of trade finance : Product risks, manufacturing risks, transport risks, commercial risks, political risks, business risks, financial risks ( market risks, credit risks and liquidty risks) Preshipment and postshipment risks and financing needsWorking capital finance and trade finance | |
3) | 3)"Terms of delivery and main documents in international trade : Major delivery terms Main documents used in international trade activities,Policy as a payment instrument | |
4) | 4)Terms of payment : Open account ( cash against goods) , documentary collection ( cash against documents ) and letter of credit ( types of L/C) | |
5) | 5)Bonds and guarantees : Common forms of guarantees (contract guarantees, payment and credit guarantees)Standby letters of credit Guarantees used in trade activities ,SuretySome cases and applications | |
6) | 6) Mid -term | |
7) | 7)Credit insurance :Export credit insurance The private sector and public sector applications, products Export credit agencies ( ECAs) Investment risks ( Political risk insurance) Application and case study | |
8) | 8)Trade finance alternatives I :Supplier credits Refinancing of supplier credits Invoice discounting Export factoring Buyer credits | |
9) | 9)Trade finance alternatives II :Forfaiting International leasing, cross border leasing,export leasing | |
10) | 10)Supply chain finance :Definition of supply chain and risks in supply chain Bank Payment Pbligations (BPO) | |
11) | 11) "Structured trade finance :Receivables finance vs traditional payment instruments Asset backed securitization ( ABS) Commodity finance | |
12) | 12) Currency risk management :Spot and forward transactions Futures markets and transactions | |
13) | 13) Döviz Riski Yönetimi :Futures Opsiyon İşlemleri" | |
14) | 14) Evaluation of the course content :Cases and applications |
Course Notes / Textbooks: | The Handbook of International Trade and Finance, The Complete Guide for International Sales, Finance, Shipping and Administration by Anders Grath,Dec.28,2013 |
References: |
Semester Requirements | Number of Activities | Level of Contribution |
Attendance | 14 | % 0 |
Presentation | 1 | % 40 |
Midterms | 1 | % 20 |
Final | 1 | % 40 |
Total | % 100 | |
PERCENTAGE OF SEMESTER WORK | % 60 | |
PERCENTAGE OF FINAL WORK | % 40 | |
Total | % 100 |
Activities | Number of Activities | Duration (Hours) | Workload |
Course Hours | 14 | 3 | 42 |
Application | 14 | 3 | 42 |
Study Hours Out of Class | 1 | 30 | 30 |
Midterms | 1 | 20 | 20 |
Final | 14 | 1 | 14 |
Total Workload | 148 |
No Effect | 1 Lowest | 2 Low | 3 Average | 4 High | 5 Highest |
Program Outcomes | Level of Contribution | |
1) | As a world citizen, she is aware of global economic, political, social and ecological developments and trends. | 2 |
2) | He/she is equipped to closely follow the technological progress required by global and local dynamics and to continue learning. | 2 |
3) | Absorbs basic economic principles and analysis methods and uses them to evaluate daily events. | 2 |
4) | Uses quantitative and statistical tools to identify economic problems, analyze them, and share their findings with relevant stakeholders. | 2 |
5) | Understands the decision-making stages of economic units under existing constraints and incentives, examines the interactions and possible future effects of these decisions. | 1 |
6) | Comprehends new ways of doing business using digital technologies. and new market structures. | 2 |
7) | Takes critical approach to economic and social problems and develops analytical solutions. | 1 |
8) | Has the necessary mathematical equipment to produce analytical solutions and use quantitative research methods. | 2 |
9) | In the works he/she contributes, observes individual and social welfare together and with an ethical perspective. | 2 |
10) | Deals with economic problems with an interdisciplinary approach and seeks solutions by making use of different disciplines. | 1 |
11) | Generates original and innovative ideas in the works she/he contributes as part of a team. | 2 |