• Hedge funds offer lifelines, especially for smaller companies
  • Banks are reluctant to exceed risk limits
  • Demand for financing for trade in goods from non-banks is growing
  • Has led to a more diverse sector

LONDON, November 15 (Reuters) – Hedge funds have increased funding for trades in commodities such as oil, gas, cocoa and copper as banks reach the limit of their risk exposure due to extreme market volatility and higher interest rates making them less competitive.

Commodity trade finance includes many types of credit,…