Financial problems — the credit insurer's view

SYNOPSIS. This paper is intended to sketch in some

historical background on ECGD's origins, to say a little about

how it is dealing with the general problems it faces today and

to indicate how contractors, by careful attention to the

preparation of their contracts, can get the most out of their

ECGD cover when things go wrong.

1 First, then, a bit of history. It was the year of the General Strike that saw the Export Credits Guarantee Depart-ment adopt its present name. Its origins go back further still, to 1919. when the Export Credits Department was set up, as a sub-Department of the Department of Overseas Trade, to operate a scheme regularised by the retrospective provisions of the Overseas Trade (Credits and Insurance) Act 1920. Ingenuity would be overstretched to discern a connection between ECGD's rechristening in 1926 and the events which attracted greater attention that year; but a rather closer link with history can be claimed for its inception seven years earlier: 1919 had seen a generation's return from the trenches and the signing of the Treaty of Versailles. And accordingly the Government's decision to empower the Board of Trade to grant credits and undertake insurances "for the purpose of re-establishing overseas trade" had been taken with two objects in view: to reduce unemployment at home and to assist in the economic restoration and development of certain emergent territories which were specifically listed in a schedule to the 1920 Act.