Expected default rates and their influence on financial stability under COVID-19 VER20210049

Application deadline

17 September 2021

Objective

Several months of lockdown in 2020 and 2021 are expected to have a devastating worldwide effect on business sustainability and survivability, especially for small and medium-sized companies. So far, extensive government measures have kept the number of corporate insolvencies in Germany low. However, a sharp rise in insolvency rates in the future cannot be ruled out. An accurate forecast of expected default rates remains difficult, mainly due to a lack of comparable data and information. Such a forecast is, however, necessary, not only to meet banking supervision and financial stability requirements but also to fulfil accounting principles, especially according to IFRS 9.

This expert panel provides a platform to discuss developments in the corporate sector during the COVID-19 pandemic and the need for default forecasting in order to ensure a sound financial system and meet accounting requirements. All participants are invited to share their views on the current situation in their respective countries. Bundesbank experts will provide deeper insights into the use and development of default prediction models and tools by the Bundesbank and will discuss related practical issues. Particular focus will be placed on the obstacles that Bundesbank experts are currently facing and discussion of potential model adjustments to improve the current situation.

Contents

  • Overview of the current situation, measures taken to support the corporate sector and future developments from a financial stability perspective.
  • Tools and models used for forecasting default rates for financial stability and accounting purposes. Discussion of limitations of traditionally used tools, especially those made evident by lockdown measures and supply line disruptions.
  • Development of alternative models and tools that may enable central banks to gain (improved) insight into reasonable default rate expectations.

Target group

The course is designed for mid-level and senior-level central bank staff with a special interest in default forecasting. Candidates are expected to have practical work experience in the area of central bank financial stability and/or accounting matters. The course might also be interesting to staff working in other central bank areas related to financial stability and accounting, such as banking supervision. Participants should be willing to share their experiences and are expected to actively contribute to the event by holding a short presentation illustrating the current situation at their central bank, with special attention paid to suggestions on how to overcome the current obstacles.

Technical requirements

Computer with microphone, camera, speakers or headphones; an up-to-date internet browser.

Online application

Please apply online by clicking on the registration button within the application period.

Registration
Registration deadline: 17. September 2021, 23:59 p.m.