Type of Exposure
Suggested Weighting
15 CILC (PCR)
5%
Comparison
with Current Practice
-
Not currently counted therefore more prudent approach under new system.
Comment
Although there is no foreign exchange risk the pre-credit risk could involve political risk intervening before the shipment is made.
CILC cash terms effectively remove the market risk. The only risk would be related to incorrect documentation and the confirming
bank.
16
CILC (Credit Risk)
0%
No change.
17
Consecutive Cover
0%
related to Buyer Credits
18
Agreed exposure on ABF
0%
cases covered by the
value of the asset
19
20
Not currently counted to avoid double counting (risk already logged under relevant BC). No change proposed.
No change in current practice (already subject to agreement with Treasury).
See 6 above.
Externalised security.
Appropriate weighting as per scheme
above to be logged against the Country of guarantor
Practice has varied but effectively no change.
Whether security can be fully externalised will depend on nature of guarantee; decision to be made case by case.
Other cases.
To be decided ad hoc.
Cases which do not fit into the categories above will need to be decided ad hoc, consistent with the overall aims of the scheme which is designed to cater for the vast majority of our business. But there will always be exceptions.