PROPOSAL FOR WEIGHTING EXPOSURE
Type of Exposure
Suggested
Comparison
Weighting
with Current Practice
1
Buyer Credits
100%
No Change.
2
Lines of Credit
100%
No Change.
3
Supplier Credits and
100%
No Change.
SCF (credit terms 365 days + )
4
"Cash" Contracts (including
100%
No Change.
Long Delivery Cash Contracts)
where Credit Terms are
365 days or more.
LA
5
Third country and local
100%
procurement payable in
Foreign Currency
No Change part of exposure recorded under 1-4 above.
Would normally form
6
Agreed Exposure on ABF cases
100%
No Change.
not covered by the value of the asset.
7
All "Cash" contracts involving credit of less than 365 days
25%
8
Operating Leasing Contracts
25%
Comment
}
Categories 1-5 will nearly
}
always be affected by a Paris Club rescheduling.
}
}
See also 18 below.
A
All business underwritten in Cardiff on these terms was not recorded. Project business not recorded in many cases although on occasion recorded at full value under current system.
Not currently recorded against PMS controls. This suggested weighting therefore represents a tightening of policy.
Cash contracts with credit terms less than 365 days will normally escape rescheduling. However, the possibility of default arising because of some market-wide problem, including ST rescheduling, cannot be ruled out completely.
Equivalent to 7. above although there should be no risk of rescheduling, as leasing transactions are excluded from Paris Club reschedulings
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