According to a recent article in the Asian Banker (Issue 86) Asia Pacific trade finance volumes crashed in October. Distrust of trading partners and aversion to specific country risk, coupled with declining import and export volumes, have forced trade finance providers to go back to basics.
As a result of the slowdown, companies are taking more precautions against defaults by trading counterparties. There has been a steady increase of requests for Letters of Credit (LCs) as well as for discounts against documents that are accepted by issuing banks. Customers who normally trade on open account basis today prefer LCs.
Source: The Asian Banker