Valuation of Credit Guarantees to State-owned Enterprises

Valuation of Credit Guarantees to State-owned Enterprises

Guarantees to back state-owned enterprise (SOE) borrowing are one of the most significant contingent liabilities that the public sector has had to face. Particularly in times of crisis, credit guarantees are an important solution for financing SOEs. It is, however, essential to fully measure their r...

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Bibliographische Detailangaben
Hauptverfasser: Prats Cabrera, Joan Oriol, Moskovits, Cynthia
Format: Text Resource
Sprache:eng
Schlagworte:
contingent liabilities
Contingent Liability
Credit Guarantee
Gross Domestic Product
guarantees
Methodology
Public Sector
State-Owned Enterprise
state-owned enterprises
valuation
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Beschreibung
Zusammenfassung:Guarantees to back state-owned enterprise (SOE) borrowing are one of the most significant contingent liabilities that the public sector has had to face. Particularly in times of crisis, credit guarantees are an important solution for financing SOEs. It is, however, essential to fully measure their risks to adequately manage the public sector balance sheet. This note examines this question and presents a simple credit guarantee valuation methodology as a first step toward sound management of the financial risks linked to SOEs.
DOI:10.18235/0002480