Since the 1970s, the philosophical tenor of secured transactions law has been embodied in an increasing variety of international conventions and instruments. Many of them draw on the assumption that harmonised modernisation of the law of credit and security lowers the cost of credit by creating predictability for international lenders. The problem merits serious consideration. First, taking security for fi nanciers and granting security in return for a loan for small and mediumsized enterprises (SMEs) to expand their businesses by accessing low-cost credit are considered globally critical. Arguably, the majority of world trade relies on credit supplied by banks and other fi nancial institutions to SMEs that comprise 97 percent of businesses and 50 percent of employment globally.2 Second, with the market interdependency as a result of the so-called globalisation, secured credit is now internationalised by virtue of international conventions and instruments. Internationalisation of secured transactions law may have some other infl uential political aspects, including more foreign investment or fi nancial aid, in return for transplanting certain laws. Be that as it may, as a result of these two characteristics, the law of international secured transactions provides an optimal lens through which to examine how different international conventions and instruments confront key policy issues. International conventions and other instruments covered by this book demonstrate that the ability to give adequate security infl uences not only the cost of credit but also, in some cases, whether credit will be available at all. International instruments, among other features, promote the granting and taking of low-cost credit
1 3.14.4, The Institutes of Justinian, 5th edn (1913), J.B. Moyle (trans.). Oxford: Clarendon, p. 132.