consider covering viable Short Term business (ECGD will still
be covering projects paid on cash/short credit terms following privatisation). Consequently, it will be necessary to introduce
a policy of two "on/off" switches, one for Short Term business
(less than 365 days credit) and one for Medium/Long Term business (credit in excess of 365 days). Such an approach will
enable us to arrange EGC clearance for Short Term cover on those markets where ECGD or EGC would not be prepared to see
M/LT cover provided.
13 If a market is considered acceptable for Short Term cover
only it must be stressed that we would not propose to introduce
a separate limit or budget for such business. Consequently,
all weighted exposure will count against MECS and the Global
Business Budget where applicable.
REINSURANCE
14 All short term business reinsured in the National Interest
will not count against the PMS Global Business Budget or Market
Exposure controls as this facility is being separately managed
against its own break-even Confidence Factor. However, new
business assumed by ECGD under the long and large agreement
will be subject to PMS exposure controls.
DEALING WITH HISTORY
15 It is impracticable to try and restate the position under the Global Business Budget and Market Exposure Controls to reflect the above weightings as existing records do not provide sufficient details of the various categories of exposure. It is proposed therefore that we should simply start to apply the
weighted scheme to new exposure assumed from now on. This
would mean that the Global Business Budget for next year will
need to take into account anticipated demand for the categories
which hitherto have not been counted. All such business will
be logged over the coming
under the budget at the
year