“Export Credit Union” in Arabia: We expect high levels of defaults in the first quarter of 2022

The CEO of the Export Credit Union, Massimo Falcioni, confirmed in an interview with “Al Arabiya” that the decline in insolvency levels globally is due to the injection of liquidity by central banks.

Falcioni expects the levels of insolvency and default to rise sharply in around the world, starting in the first quarter of next year, due to the withdrawal of incentive packages by governments.

He pointed out that the Central Bank of the UAE pumped a total of 400 billion dirhams into the banks, explaining that this The pumping has led to very low levels of insolvency and defaults.

As for the world as well, Falcioni indicated that, according to the Export Credit Agency, the lowest level of insolvency ever recorded was recorded, as hundreds of trillions of dollars were pumped into global economies, an injection equivalent to that pumped after the Second World War, and is the biggest effort for governments to maintain a balance The economy and its protection from the repercussions of covid 19.

He raised a question of what will happen next year, after the withdrawal of government support, which cannot continue forever, expecting that starting in the first quarter of next year, insolvency and default levels will rise sharply, after governments they will reduce support.

He said the Union Export Credit Company in the United Arab Emirates saw the insurance costs of the companies private they had increased because the risks had increased, but we did not do the same so as not to increase the pressures and burdens of companies.

It revealed that the percentage of losses between claims and premiums regarding “Export Credit Union” was only 16%, compared to what was normally expected, in media, by about 50%, explaining that the company was bearing a lesser burden due to massive government support and cash injections.

At the same time, according to Falcioni, the claims-to-premium ratio between claims and premiums in the Berne Union, which includes 92 countries and is the largest export credit cooperative, the claims-to-premium ratio in 2020 and in the first half of 2021 was 45% lower than 70% before the pandemic.

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