3 Issuing costs of state guaranteed bonds - Financial Risk and ...

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Annex 1 Eligibility criteria for state guarantees A1.1.2 Germany 23 Implementation date of scheme 18 October 2008 End date of entry into scheme 28 April 2009 End date of scheme 31 December 2009 Fee for instrument In line with the rates approved by the EU Commission in the Communication 'The recapitalisation of financial institutions in the current financial crisis: limitation of aid to the minimum necessary and safeguards against undue distortions of competition' 24 Maximum tenor 5 years Institution criteria Institutions that can be involved in the scheme include German credit institutions, financial service providers, insurance companies, pension funds, investment management companies, operators of securities and commodities exchange and certain parent companies of the aforementioned entities. SoFFin has imposed the following duties on eligible institution: (1) obligation on shareholders to recapitalise the relevant eligible institution, (2) the provision of a restructuring plan, (3) adjustment of the business model and spin-off of bad assets to ensure the long-term survival of the eligible institution Instrument eligibility Only non-complex securities are eligible and only securities denominated in Euros unless SoFFin can hedge its currency exposure with the relevant eligible institution bearing the associated costs. Scale of scheme €400 billion 23 For details see: http://www.linklaters.com/pdfs/publications/capitalmarkets/StateGuaranteesGuide.pdf ; http://www.mayerbrown.com/publications/article.asp?id=7848&nid=6 . 24 http://ec.europa.eu/competition/state_aid/legislation/recapitalisation_communication.pdf 118
A1.1.3 Denmark 25 Implementation date of scheme 6 October 2008 (amended on 3 February 2009) End date of entry into scheme 31 December 2010 (originally set at 30 September 2010) Fee for instrument After the amendment: Annex 1 Eligibility criteria for state guarantees (i) for banks with CDS data the fee was the lower of: either the median value of the 5-year CDS spread over a sample period starting on 1 January 2007 and ending on 31 August 2008; or the median value of the 5-year CDS spread during the same sample period for the rating category of the bank concerned; (ii) for banks without CDS data or without representative CDS data, but with a credit rating, the fee is 50 bps plus median value of 5 year CDS spreads during the same sample period for the rating category of the bank concerned, based on a representative sample of Euro area large banks; (iii) for banks without CDS data and a credit rating the fee is 50 bps plus the median value of 5 year CDS spreads during the same sample period for the lowest rating category, based on a representative sample of euro area large banks. Maximum tenor 3 years Institution criteria All financial institutions in Denmark with a banking license and a membership to the Sector Fund (mortgage institutions included by the amendment) Instrument eligibility Eligible instruments include unsecured obligations, including issued bonds (senior debt) but not including hybrid capital and subordinated debt, covered bonds and debt and deposits secured on government-bonds or covered bonds. 25 For details see: http://www.danskebank.com/en-uk/ir/the-group/Pages/Bank-packages.aspx; http://www.danskebank.com/da-dk/ir/Documents/Presentations/2008_10_PS_DKguarantee.pdf; http://ec.europa.eu/community_law/state_aids/comp-2008/nn051-08.pdf; http://ec.europa.eu/community_law/state_aids/comp-2009/n031-a-09-en.pdf; http://www.finansraadet.dk/bankkunde/det-private-beredskab/medlemmer-i-det-private-beredskab.aspx; http://borsen.dk/nyheder/privatoekonomi/artikel/1/142720/fakta_disse_banker_er_ikke_omfattet_af_statsgarantien.html . 119
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Economic Papers are written by the
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Wherever possible London Economics
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Contents Page Annex 4 Results of di
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Tables, Figures & boxes Page Table
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Glossary vi Glossary BGN Bloomberg
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Executive summary Member States (Cy
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1 Introduction 1 Introduction 1.1
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1 Introduction 1.4 Research questi
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1 Introduction analysis of the lat
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2 Overview of state guarantee sche
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Page 86 and 87: 4 Impact of state guaranteed bonds
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Page 116 and 117: 5 Key empirical findings and polic
Page 118 and 119: References Acharya V.V. and Sundara
Page 120 and 121: Lando, D. (1997). 'Modeling Bonds a
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Page 140 and 141: Annex 2 Comparison of SG and non-SG
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Page 162 and 163: Annex 4 of issuing cost model Figur
Page 164 and 165: Annex 5 -over model Annex 5 Results
Page 166 and 167: Annex 5 -over model Figure 25: Anal
Page 168 and 169: Annex 6 Availability of bank data A
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Annex 6 Availability of bank data T
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Annex 6 Availability of bank data T
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Annex 7 Linking Bloomberg and Banks
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Annex 8 Investigation of estimation
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