On the 8^th December 2011 the United Kingdom Government unveiled a report on excess capacity exchange and barter.

Surveyed barter exchanges, banks and industry professionals were asked to attend workshops and submit copies of their internal documents, audited accounts and plans to help provide some background industry information for this report

As a large barter company with offices in 17 countries and customers in 54 countries, Ormita featured in this document in a positive manner. One thing that our company does believe in is both transparency and a zero deficit policy. This has been a crucial stance for the organisation as we believe that deficits (barter exchange owners spending their own barter dollars with no ability / intention to repay) are one of the major causes of inflation in a barter currency. (Inflation is too much money chasing too few goods and is not limited to the cash economy but also exists in the barter economy).

Staff from Ormita Sweden, Ormita Germany, Ormita Italia and Ormita International all attended the UK Government event together with Dorottya Szabo (IRTA Europe Chairperson) Matteo Carcascio from the Italian Trade Commission and some other guests.

According to the City of London press releases:

“Capacity exchange development presents untapped opportunity for London

The development of an innovative, global capacity exchange hub in London could improve productivity by reducing marginal spare capacity, stimulating innovation and providing an alternative to conventional credit, according to a new report released today commissioned by the City of London Corporation, Recipco and the Economic and Social Research Council.

Capacity Trade and Credit: Emerging Architectures for Commerce and Money highlights how businesses with spare capacity in their own goods, services or infrastructure – often the case in economic downturns – could utilise their surplus via an exchange to ‘finance’ the purchase of other goods and services that they need. Capacity exchanges have the potential to offer SMEs and larger businesses an alternative credit stream in the face of a challenging environment for conventional credit as banks rebuild bank balance sheets.

According to some reports, 20% of global trade (over US$ 100bn) takes place in non-monetary exchanges. Capacity trading across the world has traditionally taken the form of simple bartering, which involves two parties – commonly SMEs in local or national trading networks – settling a transaction through a flow of goods or services rather than sovereign currencies - or cash. This form of exchange has traditionally been seen as less efficient than monetary trade since it requires finding a suitable counterparty at one point in time and is often contractually more complex.

In contrast, the internet-based multilateral exchange discussed in the report could potentially lower transaction costs through market clearing. The report finds that London is uniquely placed to facilitate the expansion in scale needed for larger government and multinational organisations to utilise capacity trading more effectively. “

Download the full Capacity Trade and Credit report (203 pages, 3Mb)

Download Executive Summary (21 pages, 721Kb)

barter, commerce, report, UK