Risk Management Manual of Examination Policies - FDIC

Transfer Risks Subject to Classification or Comment 99999
CATEGORY
AMOUNT, DESCRIPTION, AND
Exposures
Warranting
Special Other Transfer Value
COMMENTS Comment Risk Problems Substandard Impaired Loss
Argentina
October 21, 2002
All Other Exposures (including Bank Credits) 181
Less: Credit Risk Adverse Classification (181)
Net Exposure 0
In December 2001, the Argentine government defaulted on $50 billion of bonds held by foreign creditors and
subsequently imposed strict capital controls that have severely limited the ability of private borrowers to service
their external liabilities. Private Argentine borrowers have accumulated significant interest and principal arrears
to external creditors. Prior to the present interruption of external debt service, the country had been current on
payments since completing a Brady-plan restructuring of bank debt in the early 1990s. A Paris Club rescheduling
in 1992 accompanied that exercise.
U.S. banks cut their exposures to Argentina sharply in 2002, reflecting both large reductions in business activity
and credit lines, and significant write-offs. In June 2002, U.S. banks’ cross-border exposure totaled $6.2 billion,
down roughly 44 percent from a year earlier. Locally-funded business fell by over two-thirds, to $3.3 billion.
A severe and extended …
Performing short-term trade credits …
Amount scheduled represents restructured trade exposure with Banco CMF, scheduled as Value Impaired (net of
reserve). Amount is not extended for transfer risk as it is subject to a credit risk Doubtful classification.
Note that this write-up is incomplete. Refer to specific guidance for this page in the Report of Examination
Instructions Section of the Manual.
DISCLAIMER: This page is provided for illustrative purposes only. It is not intended to correspond with or
tie to information in the Bank of Anytown Report of Examination.
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