<!-- Start of picture text --> Flsure 10: Net Borrowing by Source -<br>1 99? (Pro lected)<br><!-- End of picture text --> For Romania, the impactof large prepaymentof official obligations from 1988 onwards resulted in a jump in the importance of commercial debt to a peak of about 50% in 1990. Again, with large new borrowings from ofCcial creditors in 1991 and beyond, the relative weight of commercial debt falls to below 20% of the total debt.

<!-- Start of picture text --> 3000<br>2000.-<br>15. soO - - -Bulgaria's<br>500-<br>c _ __ _<br>-soo-<br>-1000- w ,x, | ,x,at m _| s w E<br>I =<br>O Nrt borrovIng f rom 0 Net borrowing f ran U Net borrowinO f rom<br>coarieclol bat other prvate otficlel "we"e<br>cmitore<br>sIk.x We ItaT Deft on t II*irMttS mewO(t&<br><!-- End of picture text -->

unresolved debt overhang is clear in Figure I ~~~~~~~~~1; commercial banks have **the** highest relativ **e** xposure **to** Bulgaria in the region. The role of commercial creditors is declining in CSFR and Hungary as the banks retreat through negative net transfers, and it is relatively constant about 25% of the total in Poland.

## **Relative Importance of** Short **Term** Commercial Debt

Another characteristic of commercial debt that varies in the region is the _maturity profile,_ or the relative importance of short term commercial obligations. If acountry experiences a liquidity crisis or other debt servicing difficulties, holders of its short term debt are at greatest Filaure 12: 1989 tors have almost disappeared completely except from Hungary. Commercial banks continue to retreat from Hungary (net negative transfer of US$1.2 billion) and CSFR.

<!-- Start of picture text --> 10.<br>80%.<br>40%<br>20%<br>0 %<br>i = ! c<br>I<br>j<br>0short Term Comwmercil Debt E3 Neaum to LoNg TeOm Coormcl|<br>SC ZrcOTT estimffses do on iI Lou,uy toeport.L<br><!-- End of picture text -->

In Figure 10, the **outlook for** 1992 is much the same in terms of the relative importance of each type of creditor. Theonlychangeis thatotherprivatecreditorsareexpected to make some positive transfers to CSFR and Hungary, although less tha in **the** previous **year** for Hungary..

# **Characteristies ofCommercial Lending to the Region**

The relative exposure of commercia. banks may be judged by the following:

**Figure 11: Ratio of Commercial Debt to** Total Debt

risk, since such claims are costly for banks to resciedule. Bulgaria in particular is unable to service even its siot term debt, and banks are reportedly nervous about setting a precedent by allowing any kind of restrucairing or reduction of these claims. Figures 12 and 13 show the relative share of short term obligations in commercial debt.

<!-- Start of picture text --> 0 8<br>0:7 i. -a"7 gmi<br>0.6 ~-.O........°CSFR<br>0 5t<br>0.4 t<br>0.3 - Pol\e d<br>0.2 . .| *-.-Rb l<br>0.1<br>° o l cl I @ _ i_ §<br>aX 0 ! o<br><!-- End of picture text -->

As seen in Figure 11, commercial banks have clearly been Hungary's major source of financing in the **pasL** Their exposure is in fact many times that of the other creditors put together. Within Hungary's total debt, only about 16% is in the form of ST obligations. In CSFR too, commercial banks have the largest exposure by creditor

**Sese Staff "UmeebhBedon IFCCoemtryprt**

6