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Contingent liabilities risk management: Measuring and managing risk related to sovereign guarantees and on-lending

Contingent liabilities from guarantees and contingent assets from on-lending, can pose substantial risks to government finances. Prudent risk monitoring and risk management can help identify and mitigate these risks. Analyzing and measuring risks related to guarantees and on-lending is an important element of risk management and a starting point for designing and implementing various risk mitigation measures, such as guarantee fees, provisions for financial losses, and risk monitoring and reporting.