Defining short term debt and PCAF definition

Hi there,

Table 5.2 in the finance guidance states that long term debt >1 year is required, but short term debt less than one year such as line of credit and overdraft facilities are out of scope. This seems to disagree with PCAF which focuses on any balance at year end is in scope.

Therefore is the key factor the product type or the timescale? Should an overdraft facility and credit lines with maturity greater than 1 year be required or optional scope?

In addition, there are instances where corporate clients have an overdraft facility or credit line but have not drawn down on it. Therefore in this case the on balance sheet exposure is zero, but there is a contingent exposure off-balance sheet. We assume the latter is not in scope - please can you confirm?

Thanks

Hi there, just wondering if there was an update on this query please? Thanks!

Credit lines and overdraft facilities (extended to corporations) would fall under corporate loans. Under the current framework, corporate loans >1 year are required while corporate loans <1 year are also in scope but optional.

Regarding the undrawn portion of a corporate loan, the off-balance sheet exposure is currently out of scope.

Potential changes could be considered in the future but would be communicated ahead of time.

Hope that helps!

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