Document ID: chunk:federal_register_of_legislation:F2024L01074:body:0:p63
Version: federal_register_of_legislation:F2024L01074
Segment Type: other
Provision Reference: 
Character Range: 198584–204165

of losing control on the asset.
Rights and means at the lender's disposal to monitor the location and condition of the asset                                      The lender is able to monitor the location and condition of the asset at any time and place (regular reports, possibility to lead inspections).                                                The lender is able to monitor the location and condition of the asset almost at any time and place.                                                                                      The lender is able to monitor the location and condition of the asset almost at any time and place.                                                                                       The lender has a limited ability to monitor the location and condition of the asset.
Insurance against damages                                                                                                         There is strong insurance coverage including collateral damages with top quality insurance companies.                                                                                          The insurance coverage is satisfactory (not including collateral damages) with good quality insurance companies.                                                                         The insurance coverage is fair (not including collateral damages) with acceptable quality insurance companies.                                                                            The insurance coverage is weak (not including collateral damages) or with weak quality insurance companies.

 1.         Slotting criteria for commodities finance exposures
                                                                Strong                                                                                                                     Good                                                                                                                            Satisfactory                                                                                                                                                                                              Weak
Financial Strength
Degree of over-collateralisation of trade                       Strong.                                                                                                                    Good.                                                                                                                           Satisfactory.                                                                                                                                                                                             Weak.
Political and legal environment
Country risk                                                    No country risk.                                                                                                           There is limited exposure to country risk (including offshore location of reserves in an emerging country).                     There is some exposure to country risk (including offshore location of reserves in an emerging country).                                                                                                  There is strong exposure to country risk (including inland reserves in an emerging country).

Mitigation of country risks                                     Very strong mitigation. Strong offshore mechanisms. Strategic commodity. Excellent buyer.                                  Strong mitigation. Offshore mechanisms. Strategic commodity. Strong buyer.                                                      Acceptable mitigation. Offshore mechanisms. Less strategic commodity. Acceptable buyer.                                                                                                                   Only partial mitigation. No offshore mechanisms. Non-strategic commodity. Weak buyer.
Asset characteristics
Liquidity and susceptibility to damage                          The commodity is quoted and can be hedged through futures or OTC instruments. The commodity is not susceptible to damage.  The commodity is quoted and can be hedged through OTC instruments. The commodity is not susceptible to damage.                  The commodity is not quoted but is liquid. There is uncertainty about the possibility of hedging. The commodity is not susceptible to damage.                                                             The commodity is not quoted. Liquidity is limited given the size and depth of the market. There are no appropriate hedging instruments. The commodity is susceptible to damage.
Strength of sponsor
Financial strength of trader                                    Very strong, relative to trading philosophy and risks.                                                                     Strong relative to trading philosophy and risks.                                                                                Adequate relative to trading philosophy and risks.                                                                                                                                                        Weak relative to trading philosophy and risks.
Track record, including ability to manage the logistic process  Extensive experience with the type of transaction in question. Strong record of operating success and cost efficiency.     Sufficient experience with the type of transaction in question. Above average record of operating success and