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To The Rescue 2410
1. 24 October 2008
Market Economics, Credit Strategy & Interest Rate Strategy
To The Rescue
Policy Measures - Overview 1 This document, prepared jointly by Economic Research, Credit Research
and Interest Rate Strategy summarises the main measures taken so far in
Capital Injections Measures 2
response to the financial crisis. It will be updated daily.
New Debt Issuance Guarantees 4
Other Measures 6
Implications for Government The most recent developments as of this morning …
Bonds Supply in the Eurozone 9 The Canadian authorities yesterday unveiled the details of
their plan to shore up confidence in their financial system.
Under the program, the Canadian Lenders Assurance
Facility will provide guarantees up to CAD218bn (14.2% of
GDP) for new debt issuance by financial institutions.
The insurance will be provided at an annualized fee of 135bp
plus a surcharge depending on the rating of the financial
institution.
The debt guarantees add to the plan announced on October
10, under which the government will purchase up to
CAD25bn (1.5% of GDP) of mortgage pools through the
Canada Mortgage and Housing Corporation (CMHC).
Contacts In the US, the Treasury is reportedly discussing a possible
guarantee on the repayment of troubled loans. The lender in
Market Economics turn would lower the interest rate and/or principal for the life
Luigi Speranza of the loan.
Tel.: 44 20 7595 8322
Email:
luigi.speranza@bnpparibas.com The program would be restricted to situations where the
Eoin O’Callaghan
borrower's income is high enough to meet the revised
Tel.: 44 20 7595 8226 schedule of payments.
Email:
eoin.ocallaghan@bnpparibas.com According to the press, the US Treasury is also planning to
Gizem Kara take stakes in a number of regional banks as part of the
Tel.: 44 20 7595 8783 USD250bn programme to inject capital into financial
Email: gizem.kara@bnpparibas.com companies. Details of the plan might be announced as early
Credit Research as today.
Olivia Frieser
Tel.: 44 20 7595 8591
The IMF, which is in negotiations with several countries to
Email: olivia.frieser@bnpparibas.com provide emergency loan facilities, is reportedly also working
to arrange a large credit line that would allow other countries
Interest Rate Strategy to borrow US dollars.
Patrick Jacq
Tel.: 33 1 4316 9718 East Asian leaders have reportedly agreed to set up a
Email: USD80bn fund by mid-2009 to fight the global economic
Patrick.jacq@bnpparibas.com crisis, though few specifics are available.
Vishal Pathak
Tel.: 44 20 7595 8295
Email:
vishal.pathak@bnpparibas.com
www.GlobalMarkets.bnpparibas.com
2. Market Economics/Credit Strategy/Interest Rate Strategy ⎪ 24 October 2008
Table 1: Overview of the Policy Measures
Amounts Pledged* Total* Note
New Debt
Capital Local
Issuance Others EURbn % of GDP
Injections Currency
Guarantees
Austria 15 85 100 100 37.0
Includes Dexia, Ethias
Belgium 13.9 13.9 13.9 4.2 and Fortis
Cyprus 2 2 2 12.8
Finland 4 50 54 54 30.1
France 40 320 360 360 19.0
Germany 80 400 480 480 20.0
Greece 5 15 8 28 28 12.3
Ireland 500 500 500 260.0 Includes deposit
guarantee
Italy 40 40 40 2.6
Luxembourg 2.9 2.9 2.9 8.0
Netherlands 36.8 200 236.8 236.8 41.6 Includes Fortis
Portugal 20 20 20 12.3
Slovenia 8 8 8 24.0
Spain 100 50 150 150 14.3
Eurozone 200 1,378 418 1,996 1,996 22.4
Australia 8 8 4 0.7
Canada 218 25 243 151.8 15.8
Denmark 0.5 0.5 0.1 0.0 Plus losses over
USD35bn on bank
liabilites
Norway 350 350 41 15.4
South Korea 100 100 74 10.3
Sweden 15 1,500 1,515 153 49.3
Switzerland 6 6 4 1.0 Capitalisation of UBS
UK 50 250 300 385 21.4 Excludes Special
Liquidity Scheme
(GBP200bn)
US 250 1,400* 450 2,100 1,623 15.2 Does not include Fed’s
facilities, such as the
MMIFF
Note: * Includes capital injections, asset buying and guarantees on debt issuance. Excludes deposit guarantees, with the exception of Ireland where
they are included
*FDIC estimate of total size of unsecured debt falling under its guarantee
Source: Reuters, Bloomberg, BNP Paribas. Most recent news are in bold
1 To the Rescue
3. Market Economics/Credit Strategy/Interest Rate Strategy ⎪ 24 October 2008
Table 2: Capital Injections Measures
Scope Conditions Amount
Austria Up to EUR15bn
Option to buy banking shares
Aaa/AAA (5.5% of GDP)
Belgium Recapitalisation and guarantee of EUR13.9bn
Aa1/AA+ Dexia and Fortis
Cyprus Government has EUR2.0bn (12.8%
EUR2.0bn
of GDP) in reserve to bail out the
Aa3/A+ (12.8% of GDP)
banking sector
(20/10) Statement from the ministry
of finance suggested the possibility
Sum not expected to exceed
Finland of government investment in private No concrete details yet
EUR4bn
equity of viable and solvent Finnish
banks.
SPPE (originally set up to provide (21/10) SPPE buying subordinated
capital to Dexia) can provide capital loans (Tier 1 capital) issued at base
to other banks if needed rate (5 year OAT yield) + 400bp
France Up to EUR40bn
(21/10) French government will from the big six banks. Instruments
Aaa/AAA (2.1% of GDP)
inject EUR10.5bn into France’s have a 5yr call option at the issuer’s
largest six banks in form of hybrid options and the banks must provide
Tier 1 capital adequate financing to the economy.
Set up of a "financial stabilisation
Germany Banks that receive a capital Up to EUR80bn
fund" with the authorisation to issue
injection will have to cap executive (3.3% of GDP) can be used for
Aaa/AAA until EUR100bn (4.1% of GDP) for
pay and suspend dividends. recapitalisation
banks refinancing
Greece Government to boost the capital of
Up to EUR5.0bn
Greek banks by buying prefered
A1/A (2.2% of GDP)
shares with voting rights
Approved on a case-by-case basis,
Italy Minister of Finance authorised by
and conditional on the Bank of
law decree to provide capital to Unspecified
Aa2/A+ Italy's evaluation of a 3-year
banks for preferred shares
restructuring plan
Luxemb. EUR2.9bn
Individual rescue aid to Dexia/Fortis
Aaa/AAA (8.0% of GDP)
Set up of EUR20bn fund to
recapitalise banks + EUR16.8bn
Neth. individual rescue aid to Fortis. EUR36.8bn
Aaa/AAA ING will issue non-voting core Tier-
1 securities for EUR10bn to the
fund.
A winding up company owned and Banks will collectively pay up to
capitalised (DKK500k) by the state DKK7.5bn in annual fees to the
will primarily guarantee depositors winding up company. The winding
and unsecured creditors of banks. up company may also raise loans to
Denmark But in the process, if a bank fails to cover its funding requirements. The DKK0.5m capitalisation of winding
Aaa/AAA meet capital adequacy ratios or is banks must cover the first DKK35bn up company plus any losses over
declared bankrupt, its sale can be (15bn of which will be in fees) of the DKK35bn
arranged to a designated buyer or company’s losses, with the state
the winding up company can covering losses thereafter.
purchase capital.
Bank capitalisation program in the
form of subordinated LT loan
Russia
(RUB950bn) No clarity on amount, assets, timing
Baa1/BB+
National Welfare Fund (RUB785bn)
will start investing locally
No recapitisation plan but "should
S. Korea the need arise to pursue such
A2/A measures, the government will take
proper actions”
Source: Reuters, Bloomberg, BNP Paribas. Note: most recent news are in bold
2 To the Rescue
4. Market Economics/Credit Strategy/Interest Rate Strategy ⎪ 24 October 2008
Table 2: Capital Injections Measures (cont.)
Scope Conditions Amount
Stability fund of SEK15bn (0.5% of
GDP) to handle future solvency
problems at Swedish credit
All credit institutions will have to
institutions.
contribute a specific fee into the
Possible future capital injections stabilisation fund which will be risk-
through issuance of preference differentiated.
Sweden shares. Other forms of investment
As with Swedish debt guarantee
by the State could be considered. SEK15bn (0.5% of GDP)
Aaa/AAA scheme (see below), participating
The government will seek institutions will have to accept limits
permission from Parliament to allow on the compensation of key
compulsory share redemption - the executives
right, in certain circumstances, to
buy out other shareholders in
systemically important institutions at
market price.
The government will subscribe to
Switz. mandatory convertible notes of CHF6bn
Aaa/AAA UBS, with a conversion price of (1% of GDP)
CHF20 and coupons of 12.5%
At least GBP50bn of government
money available to assist in raising
UK tier 1 capital of the main UK banks Up to GBP50bn
Aaa/AAA before the end of the year. (3.6% of GDP)
GBP37bn already committed to
RBS, HBOS and Lloyds TSB.
Warrants must be included for
purchase of common stock equal to
15% of preferred investment
Restriction on executive
Under the “Emergency Economic compensation
Stabilization Act 2008”, the
Deadline for participation Nov 14,
Treasury will purchase senior non-
2008
voting preferred share from
US qualifying U.S. controlled banks, Minimum 1% of risk weighted Up to USD250bn
Aaa/AAA savings associations, and certain assets (1.8% of GDP)
bank and savings and loan holding Maximum USD25bn
companies engaged only in
5% dividend for first five years, 9%
financial activities that elect to
after
participate before 14/11/2008
Callable at par after 3 years, or can
be redeemed before with proceeds
from equity offering of T1 perpetual
preferred or common stock
Source: Reuters, Bloomberg, BNP Paribas. Note: most recent news are in bold
3 To the Rescue
5. Market Economics/Credit Strategy/Interest Rate Strategy ⎪ 24 October 2008
Table 3: New Debt Issuance Guarantees
Scope Conditions Amount/Fees
A clearing house for interbank debt Amount: up to EUR85bn
and for issuing bank bonds will be
Austria (31.4% of GDP)
set up, run by the Austrian
Kontrollbank
Covers wholesale funding entered Applies to "systemic" Belgian banks.
into or rolled over up to 31/10/2009 Amount: not specified
Belgium Renewable for a further year
with maturity not beyond Fee: TBC but firm specific
31/10/2011.
(22/10) Government is in the Amount: EUR50bn (proposed)
Guarantees for credit instruments process of requesting authority from Fee: TBC. Under current provisions,
issued by banks or bank holding Parliament for the scheme. it is possible to levy an annual
companies - bank deposit charge of 0.50% and a 0.25% flat
Guarantees could only be granted
certificates and bonds being issued fee on guarantees for long-term
Finland to viable banks that meet all
without any other financial collateral. loans. Short-term loan instruments
solvency requirements, and would
Expires 31/12/2009, with be subject to market rates. include a 0.25% charge computed
assessment by 30/4/2009 whether on the basis of the debt maturity.
Bank specific limitations.
still needed. Max maturity 5 years. The legal provisions on these levies
will now be amended.
The Republic of France may directly
Applies to debt issued not later than Amount: EUR320bn
grant its guarantees to bonds issued
France 31/12/2009 and with a maximum
by French banks in case of
maturity of five years
emergency
Amount: up to EUR400bn (16.5% of
GDP)
Fee: the law states that guarantees
Maximum maturity of 36 months. will be charged at “an appropriate
Guarantees on new senior bank Debt issued until 31/12/2009.
Germany fee” while the regulation indicates a
funding
“market risk premium plus margin”.
Reports on 17/10 suggested a 2%
annual fee plus an individual risk
premium.
Guarantee on new loans or Amount: up to EUR15bn (6.6% of
Greece
refinance existing loans GDP)
Irrevocable guarantee of interbank Amount: up to EUR500bn (260% of
Participating banks subject to
deposits, senior unsecured debt, GDP) taken together with deposit
regulation of their commercial
covered bonds and dated lower tier guarantee
Ireland conduct, government representation
2 subordinated debt of participating
on boards, and controls over Fee: TBC but firm specific and to
institutions. Valid 2 years until
executive compensation. depend on risk ratings
28/09/2010
Any instrument up to 5-yr maturity + Amount: unspecified
Subject to BoI's evaluation. Debt
Italy Bank of Italy's loans to Italian banks
issued before 31/12/2009
or Italian units of foreign banks
The government will provide Amount: EUR200bn (35.3% of
guarantees on non-complex senior GDP)
unsecured loans; ‘plain vanilla’ The scheme will include loans
Fee: based on historical credit
commercial paper, certificates of denominated in USD and GBP.
Neth. default swap spreads plus 50bp.
deposit, and medium term notes, Both principal and interest will be
Maturities of less than a year will
with maturities ranging from 3 to 36 covered.
have a flat fee of 50bp.
months. The scheme will run
through to December 31, 2009
Amount: up to EUR20bn (12.3% of
Guarantee scheme for financing of Applies to credit institutions with GDP)
Portugal
credit registered office in Portugal
(22/10) Finance Minister announced
Slovenia Expires 31/12/2009 Amount: EUR8bn
bank guarantees
Applies to debt issued after
15/10/2008 and until 31/12/2009 Amount: up to EUR100bn in 2008
Government guarantee on bank 2008 by credit entities resident in (9.5% of GDP). Unspecified for
Spain financing including interbank Spain or subsidiaries of foreign 2009
deposits and term funding credit entities which perform a
significant activity in Spain
Maximum 5 year maturity
Source: Reuters, Bloomberg, BNP Paribas. Note: most recent news are in bold
4 To the Rescue
6. Market Economics/Credit Strategy/Interest Rate Strategy ⎪ 24 October 2008
Table 3: New Debt Issuance Guarantees (cont)
Covers Australian owned banks and
locally incorporated subsidiaries of
foreign banks, credit unions and
building societies.
The facility will be restricted to
senior unsecured debt instruments.
Certificates of deposit and bank bills
Guarantee on debt securities issued will be covered
Australia by Authorised Deposit-Taking
Eligible ADIs must apply to the Fee: TBC
Institutions (ADIs)
Government for a guarantee and
the guarantee will be extended on
an issue by issue basis
Covers new and existing issuances
of debt securities up to 60 mths.
Facility will be withdrawn once
market conditions have normailised.
Insurance for new issues of certain Amount: CAD218bn
senior unsecured marketable Fee: 135bp plus 25bp for eligible
wholesale debt instruments with a Voluntary, open to federally- institutions rated at or above A- or
term to maturity of at least regulated deposit-taking institutions. equivalent. Further 25bp for other
Canada 3 months, denominated in CAD, Program commences in early eligible financial institutions, and
USD, EUR, GBP and JPY. Expires November. another surcharge for insurance on
30/4/2009, up to 3 year maturity. non-Canadian dollar denominated
debt.
Existing and new senior debt with a
max maturity of 2yrs, issued up until
See comment in Capital Injections See comment in Capital Injections
Denmark 30 Sep 2010. Only creditors related
Measures Measures
to covered bonds and holders of
subordinated debt are not covered.
Amount: up to USD100bn (domestic
Guarantee for Korean banks' new banks' external debt reaching
external debt issued October 20 maturity by June 2009 estimated to
S. Korea
2008 – June 30 2009, up to 3yr be around USD80bn)
maturity
Guarantee available to banks and
Guarantee of banks’ and mortgage mortgage institutions based and
institutions’ bonds, certificates of operating in Sweden with tier 1
deposits and other non- capital above 6% and combined tier Amount: up to SEK1.5trn (49% of
subordinated debt instruments 1&2 above 9%. GDP)
which have a maturity longer than
Conditions include restrictions on Fee: determined by risk rating, and
90 days but less than five years.
wage increases, bonus payments, set at a level between the current
Sweden Scheme includes covered bonds. market price and an estimated price
board remuneration and bank
Limited to the refinancing of executives´ severance packages under normal market conditions. No
institutions’ existing debt during the guarantee period. currency restrictions.
instruments with maturities longer
than 90 days. Covers issues up Applications made to Swedish Debt
until 30/4/2009. Could be extended Office but no decisions until bill
to 31/12/2009. approved – expected to be passed
into law by 28/10.
No concrete measures but "The
Federal Council is prepared to
guarantee new short and m/t
Switz.
interbank liabilities and money
market transactions" if refinancing
problems emerge.
Amount: take up expected:
Instruments up to 36 months GBP250bn (18% of GDP), being
Government guarantee of new short
UK maturity for eligible institutions kept under review.
and medium term debt issuance
during a 6-mth window Fee: 50bp + median CS over 12m to
7/10/2008
Includes promissory notes, CP,
Amount: estimated to cover up to
Newly issued senior unsecured interbank funding, and any
US USD1.4tn.
debt, up to 3yr maturity unsecured portion of secured debt.
Fee: 75bp flat
Debt issued up to 30/06/09
Source: Reuters, Bloomberg, BNP Paribas. Note: most recent news are in bold
5 To the Rescue
7. Market Economics/Credit Strategy/Interest Rate Strategy ⎪ 24 October 2008
Table 4: Other Measures
Deposit Guarantee Schemes Asset Buying/Other
Details Amount
Unlimited deposit guarantee for private
Austria
customers
Belgium Deposits up to EUR100k
Cyprus All bank deposits up to EUR100k
Deposit guarantee doubled to EUR50k
Finland
until end of 2009
Vehicle set up to finance banks up
to 31/12/2009. The vehicle will
forward credits to banks with a
France max duration of five years. The Up to EUR320bn (16.9% of
entity will be guaranteed by the GDP)
government. It will finance itself on
the market and pass on the funds
to the banks
100% guarantee on all retail deposits in
Germany
German banks
Increase in deposit guarantee for
individual accounts from EUR20k to
EUR100k. Valid for 3 years Issuance of government bonds, Up to EUR8.0bn
Greece deposited with banks at 50-100bp
A political commitment to guarantee all (3.5% of GDP)
spread to improve liquidity.
bank deposits, regardless of the amount,
has also been made.
Guarantee scheme for all retail and Up to EUR500bn (260% of
Ireland GDP) taken together with debt
corporate deposits. Valid for 2 years
guarantee
Facility to swap bank assets for Up to EUR40bn
Italy All bank deposits up to EUR103k
government debt (2.6% of GDP)
Luxembourg Increased to EUR100k
Bank deposit guarantee of up to
Netherlands
EUR100k
Bank deposit guarantee increased from
EUR25k to EUR100k. Applies to
Portugal
Portuguese nationals with deposits in
Portuguese banks
Unlimited guarantee on deposits (so far
up to EUR22k) to all banks operating on
Slovenia
Slovenian territory. Temporary measure
(until end of the crisis)
Fund to be set up to buy Spanish
top rated assets issued by credit
entities and securitisation funds Up to EUR50bn
resident in Spain and backed by (4.8% of GDP). An injection of
Deposit guarantee increased to EUR100k credits granted to individuals, EUR10bn (which can be
Spain
from EUR20k companies and non-financial extended to EUR30bn) has
entities. Instruments backed by already been approved for
credits granted after 7/10/2008 2008
have priority when the fund selects
investments
Deposit guarantee for Australian owned
banks, locally incorporated subsidiaries of
foreign banks, credit unions and building The Australian Office of Financial
societies (on 22/10 the government hinted Management has been directed to
Australia it is considering a limit of AUD1mn). purchase another AUD4.0bn of
AUD8.0bn (0.7% of GDP)
Runs for 3 years. There is no cap. RMBS from non-ADI lenders. This
is in addition to the AUD4.0bn
Covers deposits made at offshore already announced
branches of Australian-owned banks but
not overseas banking subsidiaries.
Source: Reuters, Bloomberg, BNP Paribas. Note: most recent news are in bold
6 To the Rescue
8. Market Economics/Credit Strategy/Interest Rate Strategy ⎪ 24 October 2008
Table 4: Other Measures (cont.)
Deposit Guarantee Schemes Asset Buying/Other
Details Amount
Bulgaria Increase of deposit guarantee up to
EUR50k
The government will purchase
Up to CAD100k of savings, checking and
Canada National Housing Act MBS insured
guaranteed investment certificates of 5yrs Up to CAD25bn (1.5% of GDP)
mortgage pools at market prices
or less
via competitive auction.
Czech Rep. Increase of deposit guarantee to EUR50k
Denmark Unlimited deposit guarantee. From
5/10/2008 to 30/09/2010
Sought IMF help in restoring
confidence.
Offered to guarantee all interbank
loans by OTP (largest independent
bank in CEE), after OTP shares
Increase of deposit guarantee from plunged on rumours the bank had
Hungary
HUF6mn to HUF13mn difficulties. OTP turned down the
offer.
Changed regulations to allow
pension funds to invest all of their
funds into government bonds,
eased also repo collateral rules
Increase of deposit guarantee from
Lithuania
EUR22k to EUR100k Until October 2009)
Opt-in deposit guarantee scheme
covering retail deposits up to NZD1mn
per depositor per guaranteed institution.
New Zealand
Covers the size of deposits at 12/10/2008
with a growth allowance of 10% p.a.
Expires 12/10/2010.
Facility to swap covered bonds NOK350bn
including mortgage backed (15.4% of GDP)
Norway securities into new government
bonds. Amount NOK350bn (15.4%
of GDP)
Poland EUR50k guarantee from EUR22.5k
Increase in guarantee on bank deposits
Romania
from EUR20k to EUR50k
Loan to VEB for takeover of
Svyazbank. CBR instructed state-
Russia owned banks to lend RUB60bn to
smaller institutions. Deposits from
CBR to smaller banks
Unlimited guarantee of deposits of
Slovak Rep. physical persons and some categories of
legal persons
No increase in deposit guarantees
planned but “should the need arise to Central bank considering buying
S. Korea
pursue such measures, the government local bank debt.(22/10)
will take proper actions”.
Bank deposit guarantee on all types of
accounts to be increased by SEK250k to
SEK500k. Deposit guarantee fund has
Sweden SEK 18bn.
Guarantee deposits at foreign banks with
clients in Sweden if their respective
governments are unable to do so
Federal Department of Finance working UBS will transfer CHF60bn of
on a 'moderate' increase in deposit illiquid assets to an SNB fund
Switzerland insurance where "the decisions taken by entity, capitalising it with CHF6bn
the EU member states will serve as an of equity and selling that stake to
important benchmark" the SNB for CHF1bn.
Source: Reuters, Bloomberg, BNP Paribas. Note: most recent news are in bold
7 To the Rescue
9. Market Economics/Credit Strategy/Interest Rate Strategy ⎪ 24 October 2008
Table 4: Other Measures (cont.)
Deposit Guarantee Schemes Asset Buying/Other
Details Amount
Special Liquidity Scheme facility GBP200bn
Deposit guarantee increased from
UK raised to make GBP200bn
GBP35k to GBP50k (14.3% of GDP)
available
Under the “Troubled Assets Relief
Programme” (TARP) the Treasury
Deposit guarantee raised from USD100k will purchase bank asset from Bank asset purchase up to
to USD250k until Dec 31 2009 eligible financial institutions. USD450bn
Unlimited guarantee on non-interest Specifics still to be announced. (3.3% of GDP)
US bearing deposit transaction accounts. On 22/10, the Fed announced a
Expires end-2009, provided for new facility (MMIFF) to buy USD- Money market mutual fund
institutions participating in debt denominated short-term paper purchases up to USD540bn
guarantee. 10bp Fee. (remaining maturity of no longer (3.9% of GDP)
than 90 days) from US mutual
funds.
Source: Reuters, Bloomberg, BNP Paribas. Note: most recent news are in bold
8 To the Rescue
10. Market Economics/Credit Strategy/Interest Rate Strategy ⎪ 24 October 2008
Table 5: Potential “Risk Scenario” Increase In Supply Due To Government Bailouts*
Total 2 =
2009 Funding Total 3 =
2009 Funding
2009 Needs Capital Debt Total 2 + 20%
2009 Deficit Needs +50%
Redemptions (ex Tbills & Injections guarantees * Debt
capital
other sources) Guarantees
EUR bn injection
Austria 9 -5 15 15 23 85 40
Belgium 19 -4 22 13.9 29 29
Finland 7 6 5 4 7 50 17
France 112 -62 140 40 160 320 224
Germany 138 -15 158 80 198 400 278
Italy 163 -50 200 200 200
Ireland 5 -9 17 17 17
Netherlands 32 2 30 36.8 48 200 88
Portugal 6 -6 11 11 20 15
Spain 30 -24 50 50 100 70
Greece 26 -9 40 5 43 15 46
Slovenia 1 0 2 2 8 4
690 787 1,027
Source: BNP Paribas. * Note: Economic funding needs scenario for 2009 is shown in the third column. We make simple EMU-wide assumptions to get an
idea of potential supply increases due to banking system bailouts. Firstly we assume 50% of proposed capital injections will be funded by long term issuance
in 2009. These injections have been announced and are currently underway so taken together with the economic funding needs, they form our base case
scenario. Second assumption is that 20% of proposed guarantees will be called upon and financed in 2009; as guarantees are contingent costs, the extra
funding required form our “risk scenario”.
9 To the Rescue