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Austria's IBSG Guarantee Program (Austria GFC)

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Abstract

Following the adoption of a joint framework by euro-area countries in response to the intensifying financial crisis in October 2008, Austria enacted a package of measures including the Interbank Market Support Act (Interbankmarktstarkungsgesetz, "IBSG"). In addition to calling for the establishment of a new clearing bank to facilitate interbank lending, IBSG permitted the Austrian government to guarantee debt securities issued by other eligible institutions. Securities issued by eligible institutions with a maturity of three years or less (five years in exceptional circumstances) were eligible for guarantee. According to IBSG, the amount outstanding for all measures taken under the act could not exceed EUR75 billion. Of this, EUR4 billion was specifically allocated for guarantees of the clearing bank, Oesterreichische Clearingbank AG (OeCAG). This was subsequently reduced to EUR50 billion. The guarantee scheme established by IBSG was used by six institutions in addition to OeCAG, for a total of approximately EUR25 billion (EUR24.05 billion, CHF 325 million, and JPY20 billion). After being extended by one year the issuance window for guarantees closed on December 31, 2010. None of the participating institutions defaulted on the guaranteed debt. The amount of guaranteed debt outstanding declined steadily, and all had matured by June 2014.

Suggested Citation

  • Simon, Claire, 2020. "Austria's IBSG Guarantee Program (Austria GFC)," Journal of Financial Crises, Yale Program on Financial Stability (YPFS), vol. 2(3), pages 593-606, April.
    • Handle: RePEc:ysm:ypfsfc:232929
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    File URL: https://elischolar.library.yale.edu/cgi/viewcontent.cgi?article=1100&context=journal-of-financial-crises
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    References listed on IDEAS

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    1. Petrovic, Ana & Tutsch, Ralf, 2009. "National rescue measures in response to the current financial crisis," Legal Working Paper Series 8, European Central Bank.
    2. Michaela Posch & Stefan W. Schmitz & Beat Weber, 2009. "EU Bank Packages: Objectives and Potential Conflicts of Objectives," Financial Stability Report, Oesterreichische Nationalbank (Austrian Central Bank), issue 17, pages 63-84.
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    More about this item

    Keywords

    credit guarantee; interbank lending; Austria;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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