What Are the Requirements for Bank Guarantee

Non-compliance with financial obligations: If a state, sub-state or so-owned enterprise fails to make a payment to the investor due under an unconditional financial payment obligation or guarantee related to an eligible investment, MIGA will protect the investor with insurance coverage that does not require the same investor to receive an arbitral award. MIGA`s compensation covers the amount of unpaid insured principal and all accrued and unpaid interest. Direct loans support the private sector through co-financing operations, known as B loans. In the case of direct lending, the private sector, in collaboration with IBRD (which provides an A loan), lends to the governments of developing countries and enjoys the privileged status of bank loans. In order to finance projects directly in the private sector, the bank must use governments as intermediaries: IBRD and private banks (or private banks). with loans A and B) finance governments, which in turn finance private parties. Another solution is for the IBRD and private banks to lend directly to the VPS after receiving guarantees from the host government. The operation of the VPS is partly determined by the limits and rules imposed by the IBRD in accordance with the procedures of the International Tendering Procedure (IPC). China`s shadow banking system includes banks` off-balance sheet operations such as PVGs, underground financial markets, fiduciary products, P2P, asset management products of investment firms, credit guarantee companies, etc. It is believed that the size of China`s shadow banking system is very large. Since fictitious lenders are the most opaque part of the Chinese banking system, it is difficult to know the exact size of the shadow banking system due to a lack of related data. There are different opinions. According to Bank of America Merrill Lynch, it is estimated at 14.5 trillion yuan ($2.2 trillion), and shadow bank loans account for about 25 percent of all Chinese loans provided by the traditional banking sector.

It is estimated that underground and off-balance-sheet loans have more than tripled, from RMB 3 trillion in 2007 to about 10 trillion yuan in 2010; and only a portion of these loans are recorded in official statistics. It is also estimated that loans from fictitious lenders could account for about 6-8% of China`s GDP. M. Liao Min of the CBRC estimated that China`s shadow banking system stood at about $32 billion at the end of 2010, and that GMPs were the largest contributor to $250.76 billion (Figure 6.11). According to UBS Warburg, China`s shadow banking system at the end of September 2012 ranged from 13.7 trillion yuan (about 26 percent of 2012 GDP) to 24.4 trillion yuan (46.5 percent of GDP) and 24.4 trillion yuan (46.5 percent of GDP). Since the beginning of 2011, when the state tightened its control over credit, clandestine financing has expanded on a larger scale. Some private sectors estimate that the size of parallel financing ranges from 8.5 trillion yuan (or $1.33 trillion) to 10 trillion yuan, with an estimated annual cash flow of 2 trillion yuan, equivalent to 5 percent of GDP (Monan, 2011). French SG Research estimates that the credit size of China`s shadow banking system was about 3 trillion yuan (about $479 billion), and some resembled U.S.

subprime mortgages that had been taken into many financial products by securitization, while Nomura estimates that the total loan amount would be 8.5 trillion yuan. The IMF estimates that China`s FMPs amount to about 8 to 9 trillion yuan, or 10 percent of total bank deposits. Regardless of the actual size of China`s shadow banking system, it cannot be ignored due to the size of its capital and its influence on the Chinese financial market. Economic Information Daily (www.jjckb.xinhua.org/), an official newspaper of the Xinhua News Agency, reported on May 14, 2013, that CLSA Asia-Pacific Markets estimates the current size of China`s shadow banking system at 13 to 17 trillion yuan, most of which are WMP and fiat products. Approximately 59% of these products are warranty-free. The Bank should continue to provide appropriate guarantees to secure its exposure to the Guarantee. It is imperative to take guarantees, especially if some credit risks identified in a credit analysis note may not be easily mitigated during the expected dynamics of the transaction. As part of the advance payment guarantee, the buyer makes an advance payment to the seller. However, this amount will be refunded by the bank in the event that the seller does not deliver the goods in accordance with the terms of the contract. The Single-Family Loan Guarantee Unit issues mortgage-related securities such as equity securities (CPs), REMICs, other structured securities and other collateral transactions. .