Coronavirus Large Business Interruption Loan Scheme and Credit Conversion Factor: Difference between pages

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''COVID-19 - business continuity - UK.''
''Bank supervision - capital adequacy''


(CLBILS).
(CCF).


The CLBILS is designed to provide UK government guarantees of 80% to enable banks to make loans of up to £200m, offered to medium and large sized firms with a turnover of over £45m per annum that have been impacted by COVID-19 who are unable to secure regular commercial financing.
The CCF converts an off balance sheet exposure to its credit exposure (Risk Weighted Assets) equivalent.  


Off balance sheet exposures - like a guarantee - have a probability of becoming a credit exposure and shifting onto the balance sheet, for example if the guarantee is called.


To be eligible, a business must:


#Be UK-based in its business activity.
The CCF is an estimate of this probability.  
#Have an annual turnover over £45 million.
#Be unable to secure regular commercial financing.
#Have a borrowing proposal which the lender:


::(a) would consider viable, were it not for the COVID-19 pandemic; and
By multiplying the CCF with the value of the guarantee or other off balance sheet exposure, you get the expected value of the credit exposure.
 
::(b) believes will enable the borrower to trade out of any short-term to medium-term difficulty.




==See also==
==See also==
* [[Bounce Back Loan Scheme]]
*[[Capital adequacy]]
*[[British Business Bank]]
* [[Credit]]
*[[Business continuity plan]]
*[[Guarantee]]
*[[Contingency plan]]
*[[Off balance sheet risk]]
*[[COPD]]
*[[Risk Weighted Assets]]
*[[Coronavirus]]
*[[Coronavirus Business Interruption Loan Scheme]]
*[[Coronavirus Job Retention Scheme]]
*[[COVID-19]]
*[[COVID-19 Corporate Financing Facility]]
*[[Disaster recovery planning]]
*[[Financial stability]]
*[[Liquidity management]]
*[[Stranded middle]]
*[[WFH]]
 
 
==Resources for COVID-19==
[https://www.treasurers.org/hub/technical/covid19 ACT technical - COVID-19]
 
[https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses UK government: support for businesses]
 
[https://www.gov.uk/coronavirus UK government: COVID-19 support hub]


[[Category:Accounting,_tax_and_regulation]]
[[Category:Compliance_and_audit]]
[[Category:The_business_context]]
[[Category:Financial_risk_management]]
[[Category:Corporate_finance]]
[[Category:Investment]]
[[Category:Long_term_funding]]
[[Category:Cash_management]]
[[Category:Financial_products_and_markets]]
[[Category:Liquidity_management]]

Revision as of 11:58, 6 July 2022

Bank supervision - capital adequacy

(CCF).

The CCF converts an off balance sheet exposure to its credit exposure (Risk Weighted Assets) equivalent.

Off balance sheet exposures - like a guarantee - have a probability of becoming a credit exposure and shifting onto the balance sheet, for example if the guarantee is called.


The CCF is an estimate of this probability.

By multiplying the CCF with the value of the guarantee or other off balance sheet exposure, you get the expected value of the credit exposure.


See also

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