During the Fall 2019 the IACPM partnered with ITFA, the International Trade and Forfaiting Association, to conduct an inaugural survey on Non-Payment Insurance.
The survey focused on current general practices and the LGD treatment for Non-Payment Insurance (NPI) policies used by lenders as a credit risk mitigation (CRM) tool to release capital or increase lending capacity.
46 IACPM and ITFA member firms participated, including 43 banks, one Development Bank, one Export Credit Agency, and one Investment Firm. Almost three-quarters of the participating banks are active users of NPI; almost two-thirds have a total balance sheet size above USD 500 Billion. They represent a majority of European AIRB banks.
High level survey findings have been shared with regulators to facilitate the discussion for a more favorable capital treatment of this important risk mitigation tool.