1. Commission Implementing Regulation (EC) No 1828/2006
Financial engineering instruments
Article 46a - Guarantees

2. Financial engineering instruments Article 46a - Guarantees
Objective
Clarify the functioning of guarantees operations
Guarantees operations must achieve an appropriate leverage factor according to market conditions
Structural Funds' contribution to guarantees and guarantee funds must ensure the most efficient use of resources of the Union

3. Financial engineering instruments Article 46a – Guarantees Paragraph 1
Resources blocked ≤ expected losses
Article 46a requires to carry out an appropriate assessment of expected losses according to market practice (risk assessment)
The resources blocked to honour guarantees shall reflect such risk assessment (=> NO over-guaranteeing).
Possibility to review the assessment if justified by subsequent market conditions

4. Financial engineering instruments Article 46a – Guarantees Paragraph 1

5. Financial engineering instruments Article 46a - Guarantees Paragraph 2
Performance
At the partial or final closure of the operational programme, the value of the guarantees shall be proportionate to the underlying investments (e.g. loans effectively issued)

6. Financial engineering instruments Article 46a - Guarantees Paragraph 2