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Contingent Liabilities risk management: A credit risk analysis framework for Sovereign Guarantees and on-lending. Country experiences from Colombia, Indonesia, Sweden,and Turkey.

Sovereign credit guarantees and government on-lending can catalyze private sector investment and fulfill specific policy objectives. However, contingent liabilities stemming from guarantees and contingent assets stemming from on-lending expose governments to risk. Prudent risk management, including risk analysis and measurement, can help identify and mitigate these risks. This paper proposes a four-step structure for analyzing and measuring credit risk.[…]