European Financial Stability Facility: Difference between revisions

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(EFSF).
(EFSF).
The European Financial Stability Facility was established in 2010 as a temporary rescue mechanism.


The EFSF’s mandate is to safeguard financial stability in Europe by providing financial assistance to Euro zone Member States.
The European Financial Stability Facility was established in 2010 as a temporary rescue mechanism to safeguard financial stability in Europe by providing financial assistance to selected Euro zone Member States.


The EFSF is authorised to use instruments and techniques including:
The EFSF provided assistance to Ireland, Portugal and Greece.


1. Lending to countries in financial difficulties.


2. Intervening in the debt primary and secondary markets.
The EFSF's role in providing further financial assistance was replaced by the European Stability Mechanism (ESM) in 2012.


3. Financing recapitalisations of banks and other financial institutions through loans to governments.


To fulfill its mission, the EFSF issues bonds or other debt instruments on the capital markets.
However, the EFSF continues to operate in order to:
*Receive loan repayments from Ireland, Portugal and Greece.
*Make interest and principal payments to holders of EFSF bonds.
*Roll over outstanding EFSF bonds, as the maturity of loans provided to Ireland, Portugal and Greece is longer than the maturity of outstanding bonds issued by the EFSF.


The EFSF is backed by guarantee commitments from the Euro zone Member States.
This Facility was replaced by the European Stability Mechanism (ESM) in 2012 which finances new programmes.  However, it continues to be used for the ongoing programmes in Greece, Portugal and Ireland.


== See also ==
== See also ==
* [[euro zone]]
* [[euro zone]]
* [[European Stability Mechanism]]
* [[Facility]]
* [[Financial ]]
* [[Financial crisis]]
* [[Financial Conduct Authority]]  (FCA)
* [[Financial stability ]] 
* [[Financial Stability Board]]
* [[Financial Stability Forum]] 
* [[Financial Stability Oversight Council]] 
* [[Financial stability ratio]] 
* [[Financial Stability Report]] 
* [[Fiscal]]
* [[Stability Bond]]
* [[Stability Bond]]
==External link==
[https://www.esm.europa.eu/efsf-overview Before the ESM - EFSF - the temporary fiscal backstop]
[[Category:The_business_context]]
[[Category:Financial_risk_management]]

Latest revision as of 22:58, 11 March 2023

(EFSF).

The European Financial Stability Facility was established in 2010 as a temporary rescue mechanism to safeguard financial stability in Europe by providing financial assistance to selected Euro zone Member States.

The EFSF provided assistance to Ireland, Portugal and Greece.


The EFSF's role in providing further financial assistance was replaced by the European Stability Mechanism (ESM) in 2012.


However, the EFSF continues to operate in order to:

  • Receive loan repayments from Ireland, Portugal and Greece.
  • Make interest and principal payments to holders of EFSF bonds.
  • Roll over outstanding EFSF bonds, as the maturity of loans provided to Ireland, Portugal and Greece is longer than the maturity of outstanding bonds issued by the EFSF.


See also


External link

Before the ESM - EFSF - the temporary fiscal backstop

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