FELABAN Annual Meeting BAFT-IFSA and FELABAN: BUILDING GLOBAL BRIDGES FOR THE BANKING INDUSTRY

1. FELABAN Annual MeetingBAFT-IFSA and FELABAN: BUILDING GLOBAL BRIDGES FOR THE BANKING INDUSTRY Punta del Este, Uruguay November 10, 2010

2. Rita Gonzalez Vice Chair, BAFT-IFSA Board of Directors Managing Director and Head of GTB Institutional Sales HSBC Securities USA BAFT-IFSA and FELABAN: BUILDING GLOBAL BRIDGES FOR THE BANKING INDUSTRY FELABAN Annual Meeting--Uruguay

3. Who we are • Over 200 members worldwide (majority non-U.S.) • Africa • Asia • Europe • Latin America • Middle East/North Africa • North America • Global, regional, local banks, import/export firms, service suppliers, law firms with banking and trade practices FELABAN Annual Meeting--Uruguay

4. What we do • BAFT-IFSA provides advocacy, education and community – building opportunities for financial services institutions and suppliers around the globe. It is the leading forum for analysis, discussion and action amongst international financial professionals on a wide range of topics affecting transaction banking, including trade finance, payments, and compliance. FELABAN Annual Meeting--Uruguay

5. Our Focus • Transaction Banking • Trade • Payments • Cash • Disciplines--compliance, risk management, operations, technology, legal, regulatory – in support of product areas FELABAN Annual Meeting--Uruguay

6. Our Value Proposition • Cooperative Agreement with FELABAN • Improve member profitability and efficiency • Dialogue with policy makers and regulators • Representation and updates on policy , regulatory issues and market trends • Establish best practices, industry guidelines, and standards; benchmark industry performance • Educate to improve member skill sets • Provide forum for discussions on industry trends FELABAN Annual Meeting--Uruguay

7. Member Activity • Members participate through -- • Regional Councils • BAFT-IFSA Latin America Council and FELABAN • Committees • Working Groups / Task Forces FELABAN Annual Meeting--Uruguay

8. Products and Services – Three Pillars • Education • Advocacy • Community FELABAN Annual Meeting--Uruguay

9. Industry Leadership • Dialogue with key leaders and stakeholders • Central Bankers, Regulators, Legislators • Export Credit Agencies • Multilateral Entities--WTO, World Bank, IMF, IFC, MDBs • Market Infrastructures • Position papers, comment letters • Benchmark surveys on global markets • Strategic advocacy / educational campaigns FELABAN Annual Meeting--Uruguay

10. Priorities and Achievements • Global and Regional Footprint • Industry Influence • Standards FELABAN Annual Meeting--Uruguay

11. Key Global Initiative:Basel II / III • CHALLENGE: Basel Committee capital and liquidity recommendations • unintended, adverse consequences • particularly harmful to SMEs, emerging markets • RESPONSE: • Comment letters representing industry worldwide • Educational publications / media outreach • Meetings with key regulators on workable solutions • Collaborative advocacy—cross-sector industry letter • international and national banking associations, industry groups FELABAN Annual Meeting--Uruguay

12. Key Global Initiative:Advocacy on Solutions to Global Crisis • CHALLENGE: Global economic crisis / trade finance market dislocations • RESPONSE: • Global forum • Educate major stakeholders (governments, ECAs, private credit insurers, multilateral agencies, banks) • Build consensus on resolving the crisis • Benchmark surveys with IMF on market dislocations • Position paper recommending solutions • Industry voice with G-20, WTO, multilaterals, policymakers, thought leaders FELABAN Annual Meeting--Uruguay

13. Key Global Initiative: BAFT-IFSA/IMF Global Trade Finance Survey • CHALLENGE: G-20, regulators, and industry need data on market dislocations • RESPONSE: BAFT-IFSA / IMF global survey results-- • Trade finance activities stabilizing and demand-driven • Larger banks more affected by credit-constraints • Change in pricing mixed, but among factors affecting pricing, institutions’ own increased cost of funds are less of a factor • Basel II has adverse affects • SURVEY CIRCULATED BY FELABAN FOR BAFT-IFSA / IMF • Responses due by November 26 • New questionnaire results out by January 2011 FELABAN Annual Meeting--Uruguay

14. Key Global Initiative: Kazakhstan Crisis • CHALLENGE: Kazakhstan Banking Sector Crisis • RESPONSE: • Coordinated communication and education on international norms for trade finance treatment • Organized industry response on regional impact • Advocacy Campaign • Prime Minister, President , Central Bank, Cabinet, diplomats • Organize coalition for letter to Kazakh leaders • International Media FELABAN Annual Meeting--Uruguay

15. Key Global Initiatives: Master Participation Agreement • CHALLENGE: Industry lacked master risk participation agreement for trade finance; inefficiencies in negotiating bilateral agreements • RESPONSE: • Master Participation Agreement (MPA) -- industry standard for trade risk participations -- English law • New form of MPA to address “true sale” accounting treatment under U.S. accounting principles -- New York law • BAFT-IFSA Legal Advisory Group--expert drafting group • Educate banks and regulators via webinar on benefits FELABAN Annual Meeting--Uruguay

16. Key Global Initiatives: Transaction Banking Global Leaders • Senior leadership of largest transaction banks • Influential voice amongst stakeholders and industry • Focus on major industry issues • Drive discussion between industry stakeholders and regulators • Fraud -- Global information exchange • Global payments screening FELABAN Annual Meeting--Uruguay

17. Key Global Initiatives: Global Trade Industry Council • Thought leadership for the international trade community • Focus on standards development, rules, universal tools and systems through advocacy and education • Assess industry needs and trends to advance advocacy and education FELABAN Annual Meeting--Uruguay

18. Key Global Initiatives: Standards • “Ask the Experts” - documentary credit rules, global payments and trade, KYC/AML compliance standards • Master Participation Agreement • Fraud and Utilities Initiatives (Transaction Bankers Global Leaders) • Supply Chain Group collaboration -- standard definitions for open account transactions • Council and committee collaboration on standard terms of reference for trade finance • Africa Payments Infrastructure Initiative • Certified Documentary Credit Specialist (CDCS) • Interbank Compensation Rules (updated 2010) • Wire Transfer Extended Remittance Information FELABAN Annual Meeting--Uruguay

19. Global Voice Newsletter FELABAN Annual Meeting--Uruguay

20. On the Horizon • Global Economic Recovery • Rebalancing of global trade -- South-South dominance • Benchmarking surveys for industry and policymakers • Public- / private- partnerships continue • Collaboration with industry groups to spur full recovery • KYC/AML costs affect “return to normal” and emerging markets • Basel II / III • Trade finance capital treatment / liquidity • Politics of implementation (global and national) • Emerging markets • Regulatory harmonization • “Cash is king” FELABAN Annual Meeting--Uruguay

21. April 10 – 13, 2011 • BAFT-IFSA Annual Meeting • Palm Springs, California Join Us FELABAN Annual Meeting--Uruguay

22. Thank you www.baft-ifsa.com info@baft-ifsa.com FELABAN Annual Meeting--Uruguay