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

BAFT-IFSA and FELABAN: BUILDING GLOBAL BRIDGES FOR THE BANKING INDUSTRY November 10, 2010FELABAN Annual Meeting--Uruguay2 Rita Gonzalez Vice Chair, BAFT-IFSA Board of Directors Managing Director and Head of GTB Institutional Sales HSBC Securities USA

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 November 10, 20103FELABAN Annual Meeting--Uruguay

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. November 10, 20104FELABAN Annual Meeting--Uruguay

Our Focus Transaction Banking Trade Payments Cash Disciplines--compliance, risk management, operations, technology, legal, regulatory – in support of product areas November 10, 20105FELABAN Annual Meeting--Uruguay

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 November 10, 20106FELABAN Annual Meeting--Uruguay

Member Activity Members participate through -- Regional Councils BAFT-IFSA Latin America Council and FELABAN Committees Working Groups / Task Forces November 10, 20107FELABAN Annual Meeting--Uruguay

Products and Services – Three Pillars Education Advocacy Community November 10, 20108FELABAN Annual Meeting--Uruguay

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 November 10, 20109FELABAN Annual Meeting--Uruguay

Priorities and Achievements Global and Regional Footprint Industry Influence Standards November 10, FELABAN Annual Meeting--Uruguay

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 advocacycross-sector industry letter international and national banking associations, industry groups November 10, FELABAN Annual Meeting--Uruguay

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 November 10, FELABAN Annual Meeting--Uruguay

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 November 10, FELABAN Annual Meeting--Uruguay

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 November 10, FELABAN Annual Meeting--Uruguay

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 November 10, FELABAN Annual Meeting--Uruguay

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 November 10, FELABAN Annual Meeting--Uruguay

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 November 10, FELABAN Annual Meeting--Uruguay

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 November 10, FELABAN Annual Meeting--Uruguay

Global Voice Newsletter November 10, FELABAN Annual Meeting--Uruguay

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 November 10, FELABAN Annual Meeting--Uruguay

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

Thank you November 10, FELABAN Annual Meeting--Uruguay