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| Definition: |
Financial guarantee corporations insure customers against losses to specified financial corporations or against financial loss on specific contracts.
Guarantors must establish financial capability for fulfilling potential obligations, and they must agree— usually for a fee—to insure that investors receive payment on securities or other financial contracts.
In addition, the financial guarantee corporations grouping includes specialized corporations that protect depositors and investors against the failure of individual financial corporations.
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| Context: |
Distinguishing precisely between financial guarantee corporations and insurance corporations is difficult.
Guarantee corporations:
(1) do not have a definable pool of assets constituting insurance technical reserves,
(2) do not carry positions off balance sheet,
(3) may not be regulated as insurance corporations, and
(4) may be limited to specific types of financial transactions.
In borderline cases, these units should be classified as insurance corporations.
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| Source
Publication: |
Monetary and Financial Statistics Manual, IMF, Washington, 2000, para. 101
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| Statistical
Theme: Financial statistics |
| Created
on Tuesday, September 25, 2001 |
| Last
updated on Wednesday, March 05, 2003 |
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