Gov't Trade Credit Insurance Backstop Could Cost £1.7B
Law360, London (July 15, 2020, 3:37 PM BST) -- The U.K. government could pay out around £1.7 billion ($2.14 billion) in insurance claims this year following the launch of a trade credit guarantee scheme, an independent public finance watchdog said.
The Office for Budget Responsibility said Tuesday the figure was an estimate based on trade credit losses from the previous financial crisis. The actual cost of claims could range between £800 million and £2.7 billion, it said.
Under the U.K.'s trade credit backstop, the government effectively pays 90% of trade credit claims, with insurers picking up the tab for the remaining 10% of losses. The scheme was launched in June in...
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