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1993 SNA Update Information - AEG recommendations for issue:
Activation of guarantees (contingent assets) and constructive obligations

Issue description
Issue description in [English] | [French] | [Russian] | [Spanish]
Loan guarantees have a significant impact on economic behavior, especially when issued by government. The 1993 SNA treats guarantees as contingent liabilities and thus has no record of the existence of the guarantee until it is activated. Further, the treatment of flows arising at the activation is not explicit. Should obligations arising from guarantees be recognized when guarantees are granted, particularly regarding those guarantees for which it is possible to make reasonable estimates of expected future claims?
AEG recommendations
Number of AEG recommendations for selected issue:2
  Corresponding meetingDate postedRecommendation
 Jan-Feb 20064/7/2006 m4guarantees;
 July 20059/12/2005A clear majority of the AEG was in favour of accepting all the recommendations in principle. However, a number of details need to be clarified (e.g. a payment appears to be treated as a capital transfer in one part of the paper and as a current transfer in another, and the exact nature of the parallel with insurance).
The AEG agreed that a revised version of the paper combining the granting and activation of guarantees should be prepared for e-discussion.
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