sub-prime credit crisis of 07

8/3/2019 Sub-Prime Credit Crisis of 07

1/56Electronic copy available at: http://ssrn.com/abstract=1112467

The Subprime Credit Crisis of 07*

!"#$"%&"'()*+(*,,-(

."/01"2(3456(7(*,,8(

Michel G. Crouhy, Robert A. Jarrow and Stuart M. Turnbull

JEL Classification:(9**+(9:,+(9:*+(9:8(

Keywords:+(;?1+(%@A@50A"1+('B$0AC(BC"AD0"1+('01E(%BABC"%"A$+(1"D4'0$0FB$0@A+(!GH1+(

14'0%"(%@'$CBC"1+($'BA1#B'"AD6+(/B54B$0@AI(

J0DK"5(9I(='@4K6L((MB$0N01+O"B2(@P(."1"B'DK(Q(>"/"5@#%"A$+(R"5L(S::(T,U)(V8(VV(*,(V8+("%B05L(%0DK"5ID'@4K6WAB$0N01ID@%X((.@&"'$(;I(3B''@Y+(3@KA1@A(9'B24B$"(!DK@@5(@P(JBABC"%"A$+(=@'A"55(ZA0/"'10$6(BA2([B%BE4'B(=@'#@'B$0@A+(R"5L(\,-(*VV]^-*7+("%B05('B_)VWD@'A"55I"24X((

!$4B'$(JI(R4'A&455+(TD@A$BD$(B4$K@'U(


2/56Electronic copy available at: http://ssrn.com/abstract=1112467

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( *

Abstract

(

RK01(#B#"'("NB%0A"1($K"(20PP"'"A$(PBD$@'1($KB$(KB/"(D@A$'0&4$"2($@($K"(14'0%"(%@'$CBC"(D'"20$(

D'0101L($K"(1"B'DK(P@'(60"52("AKBAD"%"A$+(0A/"1$%"A$(%BABC"%"A$+(BC"AD6(#'@&5"%1+(5BN(

4A2"'Y'0$0AC(1$BA2B'21+('B$0AC(BC"AD6(0AD"A$0/"(#'@&5"%1+(#@@'('01E(%BABC"%"A$(&6(P0ABAD0B5(

0A1$0$4$0@A1+($K"(5BDE(@P(%B'E"$($'BA1#B'"AD6+($K"(50%0$B$0@A(@P("N$BA$(/B54B$0@A(%@2"51+($K"(

D@%#5"N0$6(@P(P0ABAD0B5(0A1$'4%"A$1+(BA2($K"(PB054'"(@P('"C45B$@'1($@(4A2"'1$BA2($K"(0%#50DB$0@A1(@P(

$K"(DKBAC0AC("A/0'@A%"A$(P@'($K"(P0ABAD0B5(161$"%I(RK"(#B#"'(1@'$1($K'@4CK($K"1"(20PP"'"A$(0114"1(

BA2(@PP"'1('"D@%%"A2B$0@A1($@(K"5#(B/@02(P4$4'"(D'01"1I(

(

(

(

( (


3/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( :

Introduction

( RK"(D'"20$(D'0101(@P(*,,-(1$B'$"2(0A($K"(14'0%")(%@'$CBC"(%B'E"$(0A($K"(ZI!I((G$(KB1(

BPP"D$"2(0A/"1$@'1(0A(M@'$K(;%"'0DB+(`4'@#"+(;41$'B50B(BA2(;10B(BA2(0$(01(P"B'"2($KB$(Y'0$"]@PP1(@P(

5@11"1(@A(1"D4'0$0"1(50AE"2($@(ZI!I(14'0%"(%@'$CBC"1(BA2+(&6(D@A$BC0@A+(@$K"'(1"C%"A$1(@P($K"(

D'"20$(%B'E"$1+(D@452('"BDK(B($'0550@A(Z!(2@55B'1I*((G$(&'@4CK$($K"(B11"$(&BDE"2(D@%%"'D0B5(#B#"'(

%B'E"$($@(B(KB5$+(K"2C"(P4A21(KB/"(KB5$"2('"2"%#$0@A1(@'(PB05"2+(=>?1(KB/"(2"PB45$"2+(BA2(

1#"D0B5(0A/"1$%"A$(/"K0D5"1(KB/"(&""A(50a402B$"2I((


4/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( ^

RK"(2""#"A0AC(D'0101(0A($K"(14'0%"(%@'$CBC"(%B'E"$(KB1(BPP"D$"2(0A/"1$@'(D@AP02"AD"(0A(

%45$0#5"(1"C%"A$1(@P($K"(D'"20$(%B'E"$+(Y0$K(#'@&5"%1(P@'(D@%%"'D0B5(%@'$CBC"1(4A'"5B$"2($@(

14'0%"+(D@'#@'B$"(D'"20$(%B'E"$1+7(5"/"'BC"(&46]@4$(5@BA1(Th


5/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( V

0AD@%"(BA2j@'(B11"$1(B'"("50C0&5"(P@'(;5$];(5@BA1I((GA($"'%1(@P(D'"20$('01E+(;5$];(&@''@Y"'1(PB55(

&"$Y""A(#'0%"(BA2(14'0%"(&@''@Y"'1I)-(

( >4'0AC($K"(1B%"(#"'0@2+(P0ABAD0B5(%B'E"$1(KB2(&""A("ND"#$0@AB556(50a402+(YK0DK(P@1$"'"2(

K0CK"'(5"/"'BC"(BA2(C'"B$"'('01E]$BE0ACI((!#4''"2(&6(0%#'@/"2('01E(%BABC"%"A$($"DKA0a4"1(BA2(B(

1K0P$(&6(C5@&B5(&BAE1($@YB'21($K"(1@]DB55"2(k@'0C0AB$"]$@]201$'0&4$"l(&410A"11(%@2"5+(YK"'"(&BAE1(

"N$"A2(5@BA1(BA2($K"A(201$'0&4$"(%4DK(@P($K"(4A2"'560AC(D'"20$('01E($@("A2]0A/"1$@'1+(P0ABAD0B5(

0AA@/B$0@A(5"2($@(B(2'B%B$0D(C'@Y$K(0A($K"(%B'E"$(P@'(D'"20$('01E($'BA1P"'(T=.RU(0A1$'4%"A$1I)8(

?/"'($K"(#B1$(P@4'(6"B'1+($K"(C5@&B5(B%@4A$(@4$1$BA20AC(@P(D'"20$(2"PB45$(1YB#1(KB1(%45$0#50"2(

%@'"($KBA($"AP@52+)7(BA2(0A/"1$@'1(A@Y(KB/"(B(%4DK(Y02"'('BAC"(@P(0A1$'4%"A$1(B$($K"0'(201#@1B5(

$@(#'0D"+('"#BDEBC"+(BA2(201#"'1"(D'"20$('01E($K'@4CK@4$($K"(P0ABAD0B5(161$"%I(

( RK"'"(Y"'"(B(A4%&"'(@P('"B1@A1(P@'($K01(C'@Y$K(0A($K"(@'0C0AB$0@A(@P(14'0%"(5@BA1I(

( =>?1(@P(14'0%"(%@'$CBC"1(B'"($K"(=.R(0A1$'4%"A$1(B$($K"(K"B'$(@P($K"(D4''"A$(D'"20$(

D'0101+(B1(B(%B110/"(B%@4A$(@P(1"A0@'($'BADK"1(@P($K"1"(1"D4'0$0FB$0@A(#'@24D$1(KB/"(&""A(2@YA]

C'B2"2(P'@%($'0#5"];('B$0AC($@(A@A]0A/"1$%"A$(C'B2"I(RK"('"B1@A(P@'(14DK(BA(4A#'"D"2"A$"2(2'@#(

0A($K"('B$0AC(@P(0A/"1$%"A$(C'B2"(1$'4D$4'"2(#'@24D$1(YB1($K"(10CA0P0DBA$(0AD'"B1"(0A(2"50Aa4"AD6(

'B$"1(@A(14'0%"(%@'$CBC"1(BP$"'(%02]*,,V+("1#"D0B556(@A(5@BA1($KB$(Y"'"(@'0C0AB$"2(0A(*,,V]*,,\I(GA('"$'@1#"D$+(0$(01(/"'6(4A50E"56($KB$($K"(0A0$0B5(D'"20$('B$0AC1(@A(&@A21(Y"'"(D@''"D$I((GP($K"6(

KB2(&""A('B$"2(D@''"D$56+($K"'"(Y@452(KB/"(&""A(2@YAC'B2"1+(&4$(A@$(@A(14DK(%B110/"(1DB5"I( ((

( RK"(2"50Aa4"AD6('B$"(P@'(D@A/"A$0@AB5(#'0%"(B2_41$B&5"('B$"(%@'$CBC"1(T;.J1U(#"BE"2(

0A(*,,)($@(B&@4$(^i(BA2($K"A(15@Y56(2"D'"B1"2(4A$05($K"("A2(@P(*,,^+(YK"A(0$(1$B'$"2($@(0AD'"B1"(

BCB0AI((G$(YB1(1$055(&"5@Y(^i(B$($K"("A2(@P(*,,\I((c@'(D@A/"A$0@AB5(14'0%"(;.J1+($K"(#"BE(


6/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( \

@DD4''"2(24'0AC($K"(%0225"(@P(*,,*+('"BDK0AC(B&@4$()ViI((G$(2"D'"B1"2(4A$05($K"(%0225"(@P(*,,^(

BA2($K"A(1$B'$"2($@(0AD'"B1"(BCB0A($@(B##'@N0%B$"56()^i(&6($K"("A2(@P(*,,\+(BDD@'20AC($@($K"(

J@'$CBC"(


7/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( -

D'0101(YB1($K"(K4C"(2"%BA2(&6(=>?1(P@'(?(2"%BA2(P@'(

;;;('B$"2(=>?(&@A21(#B60AC(5@Y"'(60"521I(RK01(YB1(&"DB41"($K"('B$0AC(BC"AD0"1(B110CA"2(;;;(

'B$0AC1($@($K"(=>?m1(1"A0@'(&@A2($'BADK"1($KB$(202(A@$('"P5"D$($K"(=>?(&@A2m1($'4"(D'"20$('01EI*V((

?1(

P@'('"102"A$0B5(%@'$CBC"]&BDE"2(1"D4'0$0"1(T.J?(1a4B'"2($'41$1I(;(=>?(1a4B'"2($'41$(

#4'DKB1"2(K0CK(60"52(T5@Y('B$"2U(&@A21(BA2("a40$6(0114"2(&6(@$K"'(=>?1I(R@(P0ABAD"($K"(#4'DKB1"(

@P($K01(D@55B$"'B5+($K"6(0114"2(;;;('B$"2(=>?(1a4B'"2(&@A21(Y0$K(5@Y"'(60"521I(RK01+(0A($4'A+(

D'"B$"2(2"%BA2(P@'(=>?1(D@A$B0A0AC(%@'$CBC"]&BDE"2(1"D4'0$0"1(TJ?($'BADK"1I(

( RK01("A/0'@A%"A$("AD@4'BC"2(a4"1$0@AB&5"(#'BD$0D"1(&6(1@%"(5"A2"'1I*-(!@%"(%@'$CBC"(

&@''@Y"'1(KB/"("A2"2(4#(Y0$K(14'0%"(%@'$CBC"1+("/"A($K@4CK($K"0'(D'"20$(Y@'$K0A"11(a4B50P0"1(

$K"%(P@'(5@Y"'('01E($6#"1(@P(%@'$CBC"1+(@$K"'1(Y0$K(%@'$CBC"1($KB$($K"6(Y"'"(A@$(a4B50P0"2($@(

KB/"I*8(!@%"(&@''@Y"'1(BA2(%@'$CBC"(&'@E"'1($@@E(B2/BA$BC"(@P($K"(10$4B$0@A(BA2(P'B42(

0AD'"B1"2I*7(((

Section 3: Players and Issues at the Heart of the Crisis

( RK"(#'@D"11(@P(1"D4'0$0FB$0@A($BE"1(B(#@'$P@50@(@P(0550a402(B11"$1(Y0$K(K0CK(60"521(BA2(

#5BD"1($K"%(0A$@(B($'41$I(RK01(01(DB55"2($K"($'41$m1(D@55B$"'B5(#@@5I(R@(P0ABAD"($K"(#4'DKB1"(@P($K"(

D@55B$"'B5(#@@5+($K"($'41$(K@#"1($@(0114"(K0CK56('B$"2(&@A21(#B60AC(5@Y"'(60"521I(RK"($'41$(0114"1(

&@A21($KB$(B'"(#B'$0$0@A"2(0A$@($'BADK"1(Y0$K(D@/"ABA$1(1$'4D$4'"2($@(C"A"'B$"(B(2"10'"2(D'"20$(

'B$0AC(0A(@'2"'($@(%""$(0A/"1$@'(2"%BA2(P@'(K0CK56('B$"2(B11"$1I(RK"(414B5($'41$(1$'4D$4'"('"145$1(0A(

B(%B_@'0$6(@P($K"(&@A2($'BADK"1(&"0AC('B$"2(0A/"1$%"A$(C'B2"I(RK01(01(PBD050$B$"2(&6('4AA0AC($K"(

D@55B$"'B5m1(DB1K(P5@Y1($K'@4CK(B(kYB$"'PB55l(#B6%"A$(1$'4D$4'"I(RK"(DB1K(P5@Y1(B'"(B55@DB$"2($@(

$K"(&@A2($'BADK"1(P'@%($K"($@#(2@YAL($K"(1"A0@'(&@A21(C"$(#B02(P0'1$+(BA2($K"A($K"(_4A0@'(&@A21+(

BA2($K"A($K"("a40$6I(R@("A14'"($KB$(B(%B_@'0$6(@P($K"(&@A21(C"$('B$"2(;;;+($K"(YB$"'PB55(1#"D0P0"1(

$KB$($K"(1"A0@'(&@A21(C"$(BDD"5"'B$"2(#B6%"A$1(TBA2($K"(_4A0@'(&@A21(C"$(A@A"U+(0P($K"(D@55B$"'B5(

#@@5(B##"B'1(1$'"11"2(0A(D"'$B0A(YB61I:,(!$'"11(01(414B556(%"B14'"2(&6(TD@55B$"'B5j50B&050$6U(BA2(

TDB1K]P5@Yj&@A2]#B6%"A$U('B$0@1('"%B0A0AC(B&@/"(D"'$B0A($'0CC"'(5"/"51I(;(14'"$6(Y'B#(T0A14'BAD"(

#4'DKB1"2(P'@%(B(%@A@50A"U(%B6(B51@(&"(41"2($@("A14'"(14#"'(1"A0@'(;;;(D'"20$('B$0AC(1$B$41I(GA(

B220$0@A+($K"(14#"'(1"A0@'($'BADK"1(B'"(@P$"A(4AP4A2"2+(%BE0AC($K"%(%@'"(B$$'BD$0/"($@(&BAE1I(


8/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( 8

( RK"'"(B'"(D@1$1(B11@D0B$"2(Y0$K(1"D4'0$0FB$0@AL(%BABC"'0B5($0%"+(5"CB5(P""1(BA2('B$0AC(

BC"AD6(P""1I((RK"("a40$6(K@52"'1(@P(BA(B11"$]&BDE"2($'41$(T;

4A0a4"(DKB'BD$"'01$0D1+($K01(D@452(C"A"'B$"(2"%BA2(BA2(B$$'BD$(A"Y(1@4'D"1(@P(P4A21I(O@Y"/"'+(

B11"$(1"D4'0$0FB$0@A(1$B'$"2(0A($K"(%02()78,1+(1@(0$(01(20PP0D45$($@(B$$'0&4$"($K"(2"%BA2($KB$(Y"(KB/"(

Y0$A"11"2(@/"'($K"(5B1$(P"Y(6"B'1(P@'(;;;('B$"2($'BADK"1($@(A"Y(1@4'D"1(@P(P4A21I((;P$"'($K01(

5"AC$K(@P($0%"+(0A/"1$@'1(1K@452(KB/"(5"B'A$($@(#'0D"($'BADK"1(0A(B(YB6($KB$('"P5"D$1($K"(0AK"'"A$(

'01E1I(GP(;

c"&'4B'6(*,,-+(!Qe($@@E($K"(4A#'"D"2"A$"2(1$"#(@P(#5BD0AC(@A(kD'"20$(YB$DKl($'BA1BD$0@A1($KB$(

KB2(&""A(D5@1"2(B1('"D"A$56(B1($K"(5B1$(6"B'I((c'@%($K"(P0'1$(a4B'$"'(@P(*,,V($@($K"($K0'2(a4B'$"'(@P(

*,,-+(!$BA2B'2(BA2(e@@'m1(T*,,8U('"#@'$1(P@'(=>?1(@P(B11"$(&BDE"2(1"D4'0$0"1+(\\i(Y"'"(

2@YAC'B2"2(BA2(^^i(Y"'"(2@YAC'B2"2(P'@%(0A/"1$%"A$(C'B2"($@(1#"D45B$0/"(C'B2"+(0AD5420AC(

2"PB45$I(c@'('"102"A$0B5(14'0%"(%@'$CBC"(&BDE"2(1"D4'0$0"1+()-i(Y"'"(2@YAC'B2"2+(BA2(7I8i(

Y"'"(2@YAC'B2"2(P'@%(0A/"1$%"A$(C'B2"($@(1#"D45B$0/"(C'B2"+(0AD5420AC(2"PB45$I:*((RK"1"(DKBAC"1(

B'"(5B'C"(BA2(AB$4'B556('B01"(a4"1$0@A1(B&@4$($K"('B$0AC(%"$K@2@5@C0"1("%#5@6"2(&6($K"(20PP"'"A$(

BC"AD0"1I(((

.B$0AC(BC"AD0"1(B'"(B$($K"(D"A$"'(@P($K"(D4''"A$(D'0101(B1(%BA6(0A/"1$@'1('"50"2(@A($K"0'(

'B$0AC1(P@'(%BA6(20/"'1"(#'@24D$1L(%@'$CBC"(&@A21+(B11"$(&BDE(D@%%"'D0B5(#B#"'(T;


9/56


10/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( ),

0A/"1$%"A$(C'B2"(B11"$1I(

P@'(B(C0/"A(D'"20$('B$0ACI(>"$"'0@'B$0@A(@P(D'"20$(a4B50$6+(Y055(5"B2($@(B(2@YAC'B2"(@P($K"(;

1$'4D$4'"2(D'"20$1I((


11/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( ))

( .B$0AC(BC"AD0"1(1""E($@(%BE"($K"('B$0AC(@P(14'0%"('"5B$"2(1$'4D$4'"2(D'"20$(1$B&5"(

$K'@4CK($K"(K@410AC(D6D5"+(B1(Y0$K($K"('B$0AC(@P(D@'#@'B$"(&@A21I(RK"'"P@'"+('B$0AC(BC"AD0"1(%41$(

'"1#@A2($@(BA$0D0#B$"2(1K0P$1(0A($K"(5@11(201$'0&4$0@A(24'0AC($K"(K@410AC(D6D5"(&6(0AD'"B10AC($K"(

B%@4A$(@P(=`(A""2"2($@(E""#($K"('B$0AC1(D@A1$BA$(B1("D@A@%0D(D@A20$0@A1(2"$"'0@'B$"+(@'(&6(

2@YAC'B20AC($K"(1$'4D$4'"2(D'"20$I(RK"(D@A$'B'6(KB##"A1(YK"A($K"(K@410AC(%B'E"$(0%#'@/"1I:-(

ZABA$0D0#B$"2(DKBAC"1(%B6('"145$(0A(B('B$0AC(BC"AD6(DKBAC0AC(B('B$0AC(P@'(B(#'@24D$I(dKB$(YB1(

A@$(BA$0D0#B$"2(&6(1@%"(0A/"1$@'1(YB1($K"(/@5B$050$6(@P($K"('B$0AC(DKBAC"1($KB$(P@55@Y"2(B1($K"(

K@410AC(%B'E"$(1$B'$"2($@(2"$"'0@'B$"I:8(

( c@'("NB%#5"+(24'0AC($K"(1"D@A2(Y""E(@P(3456(*,,-+(!Qe(2@YAC'B2"2(Z!b-I:(&0550@A(@P(

1"D4'0$0"1(1@52(0A(*,,V(BA2(*,,\I(;(P"Y(Y""E1(5B$"'+(J@@26m1(GA/"1$@'(!"'/0D"(15B1K"1('B$0AC1(@A(

\7)(1"D4'0$0"1(P'@%(*,,\+(@'0C0AB556(Y@'$K(Z!b)7I^(&0550@AI((!@%"(-8(@P($K"(&@A21(KB2(J@@26m1(

$@#('B$0AC(@P(;BBI(RK"(1"D4'0$0"1(Y"'"(&BDE"2(&6(1"D@A2(50"A(%@'$CBC"1($KB$(0AD542"2(#0CC6&BDE(

%@'$CBC"1I((J@@26m1(1$B$"2($KB$($K"(DB41"(P@'($K"(2@YAC'B2"1(YB1($K"(2'B%B$0DB556(#@@'(@/"'B55(

#"'P@'%BAD"(@P(14DK(5@BA1(BA2('010AC(2"PB45$('B$"1I((c0$DK(B51@(2@YAC'B2"2(14'0%"(&@A21(1@52(

&6("D"%&"'(BA@$K"'(Z!b)^(&0550@A(YB1(2@YAC'B2"2(Y0$K(Z!b),V(&0550@A(4A2"'('"/0"YI(

3.2 Mortgage Brokers and Lenders

?'0C0AB$0AC(&'@E"'1(KB2(50$$5"(0AD"A$0/"($@(#"'P@'%(24"(2050C"AD"(BA2(%@A0$@'(&@''@Y"'1m(D'"20$(

Y@'$K0A"11+(B1(%@1$(@P($K"(14'0%"(5@BA1(@'0C0AB$"2(&6(&'@E"'1(Y"'"(14&1"a4"A$56(1"D4'0$0F"2I((

RK01(#K"A@%"A@A(YB1(BCC'B/B$"2(&6($K"(0AD"A$0/"(D@%#"A1B$0@A(161$"%(P@'(&'@E"'1+(&B1"2(@A($K"(

/@54%"(@P(5@BA1(@'0C0AB$"2+(Y0$K(P"Y(A"CB$0/"(D@A1"a4"AD"1(P@'($K"(&'@E"'1(0P($K"(5@BA(2"PB45$"2(

Y0$K0A(B(1K@'$(#"'0@2I:7((

( >01$'"11(B%@AC(14'0%"(%@'$CBC"(5"A2"'1(YB1(/010&5"(24'0AC(*,,\I((e'@&5"%(1$B'$"2($@(

B##"B'(YK"A($K"(c"2(1$B'$"2($@('B01"(0A$"'"1$('B$"1I(RK01('B01"2($K"(D@1$(@P(&@''@Y0AC(BA2(%B2"(0$(

%@'"("N#"A10/"(P@'(#"@#5"($@(%""$($K"0'(P5@B$0AC('B$"(0A$"'"1$(#B6%"A$1(@A($K"0'(5@BA1I(;$($K"("A2(

@P($K"(6"B'+(?YA0$(J@'$CBC"(!@54$0@A1(GADI('BAE"2(B1($K"())$K(5B'C"1$(0114"'(@P(14'0%"(

%@'$CBC"1(D5@1"2(0$1(2@@'1I((RK01(YB1(#"'KB#1(14'#'010AC+(C0/"A($KB$(J"''055(h6ADK(Q(=@(KB2(

#4'DKB1"2(B(%0A@'0$6(1$BE"(0A(?YA0$($K"(#'"/0@41(6"B'I((GA($K"(P0'1$(a4B'$"'(@P(*,,-+(M"Y(="A$4'6+(

'BAE"2(B1($K"(A4%&"'($Y@(5"A2"'(0A($K"(14'0%"(%B'E"$+(B51@(D5@1"2(0$1(2@@'1I(?$K"'1(B51@(PB05"2(

@'(5"P$($K"(&410A"11I((


12/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( )*

( e'@&5"%1(Y0$K(%@'$CBC"(5"A2"'1(1#'"B2(P'@%($K"(14'0%"($@(@$K"'(#B'$1(@P($K"(%@'$CBC"(

%B'E"$+(B1(D@AD"'A1(B&@4$(D@55B$"'B5(/B54"1(0AD'"B1"2I((RK"(1KB'"(#'0D"(@P(RK@'A&4'C(J@'$CBC"(

GADI+(YK0DK(1#"D0B50F"1(0A(5B'C"(T_4%&@U(#'0%"(K@%"(5@BA1+(2'@##"2(^-i(BP$"'(0$(1$B$"2($KB$(0$(YB1(

2"5B60AC(0$1(1"D@A2(a4B'$"'(20/02"A2(BA2(YB1('"D"0/0AC(%B'C0A(DB551(P'@%(D'"20$@'1+(24"($@($K"(

2"D50A0AC(/B54"(@P(%@'$CBC"1(41"2(B1(D@55B$"'B5I((MB$0@AB5(=0$6(O@%"(`a40$6(=@'#I+($K"(YK@5"1B5"(

&'@E"'("a40$6(5"A20AC(4A0$(@P(MB$0@AB5(=0$6(=@'#I(BAA@4AD"2($KB$(0A('"1#@A1"($@(%B'E"$(

D@A20$0@A1+(0$(KB1(141#"A2"2(B##'@/B51(@P(A"Y(K@%"("a40$6(5@BA1(BA2(50A"1(@P(D'"20$I((;"C01(

J@'$CBC"(=@'#I(TO@41$@AU(BAA@4AD"2(0$(01(4AB&5"($@(%""$(D4''"A$(5@BA(D@%%0$%"A$1(BA2(1$@##"2(

$BE0AC(%@'$CBC"(B##50DB$0@A1I((?$K"'(0A1$0$4$0@A1(B51@(Y0$K2'"Y(P'@%($K"(14'0%"(BA2(;5$];(

%B'E"$1I((;5$];(@'0C0AB$@'1+(14DK(B1(;%"'0DBA(O@%"(J@'$CBC"+(P05"2(P@'(&BAE'4#$D6I(((

( !%B55(%@'$CBC"(&'@E"'1(Y"'"(&"0AC(K4'$(0A(B(A4%&"'(@P(20PP"'"A$(YB61I((9J;=(hh=(

BAA@4AD"2($KB$(0$(YB1($0CK$"A0AC(0$1(5"A20AC($"'%1I(G$(Y@452(A@$(#'@/02"(YB'"K@41"(P4A20AC(P@'(

14'0%"(5@BA1(BA2(%@'$CBC"1(P@'(&@''@Y"'1(YK@(202(A@$(/"'0P6($K"0'(0AD@%"(@'(B11"$1I(JBA6(

1%B55(5"A2"'1(41"(1K@'$]$"'%(YB'"K@41"(5@BA1($KB$(B55@Y($K"%($@(P4A2(%@'$CBC"1(4A$05($K"6(DBA(&"(

1@52($@(0A/"1$@'1I((RK"(0AB&050$6($@(YB'"K@41"('"24D"1($K"(B/B05B&050$6(@P(D'"20$I(

( ?'0C0AB$@'1(B51@(1#"A$(P4A21(#"'14B20AC(5"C015B$@'1($@('"24D"($@4CK(A"Y(5BY1('"1$'0D$0AC(

5"A20AC($@(&@''@Y"'1(Y0$K(1#@$$6(D'"20$1I((!0%#1@A(T*,,-U('"#@'$1($KB$(;%"'0a4"1$(J@'$CBC"(=@I+(

YK0DK(YB1(@A"(@P($K"(AB$0@Am1(5B'C"1$(14'0%"(5"A2"'1+(1#"A$(@/"'(Z!b*,(%0550@A(0A(#@50$0DB5(

2@AB$0@A1I(=0$0C'@4#(GADI+(d"551(cB'C@(Q(=@I(=@4A$'6Y02"(c0ABAD0B5(=@'#I(BA2($K"(J@'$CBC"(


13/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( ):

$@(14##@'$(%@1$(!GH(0P($K"6(KB2($@(#B6(B(D'"20$(1#'"B2(P@'($K"0'(&@''@Y0AC1I(O"AD"+(P@'(B5%@1$(B55(

!GH1+($K"(;;;('B$0AC(P@'($K"0'(2"&$(YB1("11"A$0B5I(RK01(01(B51@(#B'$56(24"($@($K"(D@%%"'D0B5(#B#"'(

T=eU(%B'E"$+(BA2(K@Y(0$(@#"'B$"1I(=e(01(K"52(&6(%@A"6(%B'E"$(P4A21+(BA2(%@1$(YBA$(@A56(;;;(

'B$"2(#B#"'I((

( 9"A"'B5(2"1D'0#$0@A1(@P($K"(%"$K@2@5@C0"1("%#5@6"2(P@'(!GH1(&6($K"(BC"AD0"1(B'"(

#4&50D56(B/B05B&5"(@A($K"0'(Y"&(10$"1I((RK"(&B10D(B##'@BDK(01($@(2"$"'%0A"(YK"$K"'($K"(1"A0@'(2"&$(

@P($K"(/"K0D5"(Y055('"$B0A($K"(K0CK"1$(5"/"5(@P(D'"20$(Y@'$K0A"11+(TP@'("NB%#5"+(;;;j;])S('B$0ACU(

4A$05($K"(/"K0D5"(01(Y@4A2]2@YA(P@'(BA6('"B1@AI((RK"(5"/"5(@P(DB#0$B5(01(1"$($@(BDK0"/"($K01(;;;(

$6#"(@P('B$0AC+(Y0$K(DB#0$B5(&"0AC(41"2($@(%BE"(4#(#@110&5"(1K@'$(PB551I((RK"(/"K0D5"(01(2"10CA"2(

Y0$K($K"(0A$"A$($@('"#B6(1"A0@'(50B&050$0"1+(Y0$K(B$(5"B1$(BA(;;;(5"/"5(@P(D"'$B0A$6+(&"P@'"($K"(

/"K0D5"(D"B1"1($@("N01$I((GP(B($'0CC"'("/"A$(@DD4'1(BA2($K"(!GH(01(Y@4A2]2@YA(&6(0$1(%BAC"'(

T2"P"B1BAD"U(@'($K"($'41$""(T"AP@'D"%"A$U+($K"(#@'$P@50@(01(C'B24B556(50a402B$"2I((d0A2]2@YA(

@DD4'1(0P($K"('"1@4'D"1(B'"(&"D@%0AC(0A14PP0D0"A$($@('"#B6(1"A0@'(2"&$I((M@(2"&$(Y055(&"(P4'$K"'(

'@55"2(@/"'(@'(0114"2(BA2($K"(DB1K(C"A"'B$"2(&6($K"(1B5"(@P(B11"$1(01(41"2($@(#B6@PP(1"A0@'(

50B&050$0"1I(((

( RK"('01E1($KB$(B(!GH(KB1($@(%BABC"($@('"$B0A(0$1(;;;('B$0AC(0AD542"(D'"20$+(%B'E"$+(

50a4020$6+(0A$"'"1$('B$"(BA2(P@'"0CA(D4''"AD6+(BA2(%BABC"'0B5(BA2(@#"'B$0@AB5('01EI((='"20$('01E(

B22'"11"1($K"(D'"20$(Y@'$K0A"11(@P("BDK(@&50C@'(BA2($K"('01E(24'0AC($K"(Y@4A2]2@YA(#"'0@2(YK"A(

$K"(!GH(B11"$1(KB/"(14PP"'"2(D'"20$(2"$"'0@'B$0@AI((c@'(%B'E"$('01E+($K"(%BABC"'(01('"a40'"2(@A(B(

'"C45B'(&B101($@(%B'E]$@]%B'E"$($K"(50a402(B11"$1(@P($K"(#@'$P@50@(BA2(%B'E]$@]%@2"5($K"(0550a402(

B11"$1I((dK"A(B(!GH(01(P@'D"2($@(1"55(B11"$1(4A2"'(4APB/@'B&5"(D@A20$0@A1+($K01(Y055(0A(C"A"'B5(

BPP"D$($K"(/B54"(@P(B55(0$1(B11"$1I((RK"(%BABC"'m1(B&050$6($@(B22'"11($K01($6#"(@P(10$4B$0@A(01(

B11"11"2I((h0a4020$6('01E(B'01"1(&"DB41"(@P(TBU($K"(A""2(@P('"P0ABAD0AC(24"($@($K"(%B$4'0$6(

%01%B$DK(&"$Y""A(B11"$1(BA2(50B&050$0"1X(BA2(T&U(1@%"(@P($K"(#@'$P@50@m1(B11"$1(Y055('"a40'"(24"(

2050C"AD"(&6(#@$"A$0B5(0A/"1$@'1(BA2($K01(Y055(0AD'"B1"($K"(5"AC$K(@P($K"(1B5"(#"'0@2I((RK"(!GH(%41$(

2"%@A1$'B$"($KB$(B#B'$(P'@%($K"(/"K0D5"m1(DB1K(P5@Y1($KB$(#'@/02"(50a4020$6+(0$(KB1(&BDE1$@#(50A"1(@P(

D'"20$(P'@%(20PP"'"A$(0A1$0$4$0@A1+(BA2(K0CK56(50a402(B11"$1($KB$(DBA(&"(a40DE56(1@52+(1@($KB$(0$(01(

B&5"($@(2"B5(Y0$K(%B'E"$(201'4#$0@A1I((GA(B(!GH+($K"(50B&050$0"1(B'"('@55"2(@/"'+(#'@/02"2($KB$(

2"P"B1BAD"^*(KB1(A@$(@DD4''"2I((GA($K"@'6+(B(!GH(D@452(D@A$0A4"(0A2"P0A0$"56I^:((

( ;DD@'20AC($@(J@@26m1(T!"#$"%&"'(V+(*,,-U+($K"'"(Y"'"(1@%"(:,(!GH1(BA2($K"($@$B5(

/@54%"(4A2"'(%BABC"%"A$(@P(!GH1(BA2(!GH]h0$"1^^(KB2(A@%0AB5(/B54"1(@P(B##'@N0%B$"56(

Z!b^,,(&0550@A(BA2(Z!b)*(&0550@A('"1#"D$0/"56(B$($K"("A2(@P(;4C41$(*,,-I(RK"(Y"0CK$"2(B/"'BC"(

50P"(@P($K"(B11"$(#@'$P@50@1(0A($K"1"(/"K0D5"1(01(0A($K"(:]^(6"B'('BAC"I(


14/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( )^

( RK"(!GH1('"50"2(@A(&"0AC(B&5"($@(D@A$0A4@4156('@55(@/"'($K"0'(1K@'$]$"'%(P4A20AC(BA2+(

"/"A($K@4CK($K"6(Y"'"(k&BAE'4#$D6('"%@$"l(P'@%($K"0'(1#@A1@'1+($K@1"($KB$(Y"'"(4AB&5"($@(

BDK0"/"($K01(Y"'"(B&5"($@($4'A($@($K"0'(1#@A1@'0AC(&BAE1($KB$(KB2(4A2"'$BE"A($@(#'@/02"($K"%(Y0$K(

&BDE1$@#(50a4020$6(/0B(D'"20$(50A"1(0A(14DK(10$4B$0@A1I(GA(PBD$($K"1"(!GH1+(BE0A($@(k4A'"C45B$"2(

&BAE1l(P4A20AC(5@AC]$"'%(B11"$1(Y0$K(1K@'$]$"'%(P4A20AC('"1@4'D"1+(KB/"(&""A(B(D@A$'0&4$@'($@($K"(

D4''"A$(D'"20$(D'0101I(

( ;1($K"(D'"20$(D'0101(0A$"A10P0"2(BA2($K"(%@'$CBC"]&BDE"2(1"D4'0$0"1(K"52(&6($K"(!GH1(

1422"A56(1$B'$"2($@(2"D50A"(0A(/B54"+(1@%"(@P($K"(;"D"%&"'(\+(*,,-U($@@E(Z!b-I\(&0550@A+(BA2(=0$0C'@4#(T>"D"%&"'()^+(*,,-U(Z!b^7(

&0550@AI(RK01(01(A@$(B(D@%#5"$"(501$0ACI((!@D0p$p(9pAp'B5"(&B05"2(@4$(0$1(0A/"1$%"A$(/"K0D5"(Y0$K(B(

Z!b^I:(&0550@A(50A"(@P(D'"20$(T>"D"%&"'())+(*,,-UI( ( (

( RK"(#50CK$(@P(!GH1(D@A$0A4"1I((GA(c"&'4B'6(*,,8+(=0$0C'@4#(BAA@4AD"2($KB$(0$(#5BA1($@(

#'@/02"(B(Z!b:IV(&0550@A(PBD050$6($@(14##@'$(10N(@P($K"(1"/"A(!GH1(0$($@@E(@A$@(0$1(&B5BAD"(1K""$($@(

1K@'"(4#($K"0'(2"&$('B$0AC(BA2(#'@$"D$(D'"20$@'1I(;51@(0A(c"&'4B'6+(!$BA2B'2(=KB'$"'"2(PBD"2($K"(

#'@1#"D$(@P(B(P0'"(1B5"(B$(0$1(Z!b-I)(&0550@A(dK01$5"_BDE"$(!GHI(RK"(/B54"(@P($K"(B11"$1(KB2(PB55"A(

$@(5"11($KBA(KB5P(@P($K"(B%@4A$(@P(1$B'$]4#(DB#0$B5+(YK0DK(01(B($'0CC"'(P@'(DB550AC(0A('"D"0/"'1I(J@'"(

'"D"A$56(Tc"&'4B'6(*)+(*,,8U(>'"12A"'(


15/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( )V

B##'@N0%B$"56(Z!b*I\($'0550@A+(Y0$K(%@'"($KBA(KB5P(@P(%4A0D0#B5(&@A21(&"0AC(0A14'"2(&6(

%@A@50A"1I(RK01(0A14'BAD"(Y'B#(C4B'BA$""1(B($'0#5"];('B$0AC($@($K"(&@A21(0114"2(&6(ZI!I(

%4A0D0#B50$0"1I(

( GA('"D"A$(6"B'1+(%4DK(@P($K"0'(C'@Y$K(KB1(D@%"(0A(1$'4D$4'"2(#'@24D$1(14DK(B1(B11"$]

&BDE"2(&@A21(BA2(=>?1I(RK"($@$B5(@4$1$BA20AC(B%@4A$(@P(&@A21(BA2(1$'4D$4'"2(P0ABAD0AC(0A14'"2(

&6(%@A@50A"1(01(B'@4A2(Z!b*IV($'0550@AI(;DD@'20AC($@(!Qe+(%@A@50A"1(0A14'"2(Z!b)*-(&0550@A(@P(

=>?1($KB$('"50"2+(B$(5"B1$(#B'$56+(@A('"#B6%"A$1(@A(14'0%"(K@%"(5@BA1(BA2(PBD"(#@$"A$0B5(5@11"1(

@P(Z!b)7(&0550@AI(

( !0AD"($K"("A2(@P(*,,-(%@A@50A"1(KB/"(&""A(1$'4CC50AC($@(E""#($K"0'($'0#5"];('B$0ACI(?A56(

$K"($Y@(%B_@'(@A"1+(J


16/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( )\

'01E0"'(BD$0/0$0"1+(14DK(B1(C4B'BA$""0AC(D@%#5"N(1$'4D$4'"2(D'"20$(#'@24D$1I(dB''"A(

P0ABAD"($K"(#4'DKB1"(@P($K"(%@'$CBC"1U(B'"(@/"'(/B54"2(&6($K"(%B'E"$I((

( ZA1@#K01$0DB$"2(0A/"1$@'1(Y"'"(5"11(0AP@'%"2($KBA(1@#K01$0DB$"2(0A/"1$@'1(T2"P0A"2($@(&"(

$K@1"(0A/"1$@'1(0A/@5/"2(0A($K"(@'0C0AB$0@A(#'@D"11(0A(1@%"(%BAA"'UI(RK01(B16%%"$'0D(0AP@'%B$0@A(

YB1(C"A"'B$"2(&6($Y@(PBD$1I(c0'1$+($K"(D@%#5"N0$6(@P($K"(;

$K"(DB1K(P5@Y1(A"B'56(0%#@110&5"I(;5$K@4CK(2B$B(D@452(KB/"(&""A(#4'DKB1"2(P'@%(h@BA(e'0D0AC(

=@'#@'B$0@A+(0$(YB1(0AD@%#5"$"(Y0$K('"1#"D$($@($K"(D4''"A$(1$B$"(@P($K"(4A2"'560AC(%@'$CBC"(5@BA1I(

c4'$K"'%@'"+(B5$"'AB$0/"(K01$@'0DB5(2B$B&B1"1(Y0$K(K01$@'0"1(@P(%@'$CBC"(5@BA1(Y"'"(A@$(

'"#'"1"A$B$0/"(@P(A"Y('01E($'"A21(&"DB41"($K"(A"Y(%@'$CBC"(5@BA1(KB2($"B1"'('B$"1+(A@(#'0AD0#B5(

#B6%"A$1(0A($K"(&"C0AA0AC+(BA2(20PP"'"A$(5@BA(1$BA2B'21(TK0CK(5@BA($@(/B54"('B$0@1+(BA2(A@(

2@D4%"A$B$0@AUI(

( RK"(0AP@'%B$0@A(B16%%"$'6(0A(%B'E"$1(YB1("/"A(C'"B$"'(P@'(=>?1($KBA(P@'(;

TB##'@N0%B$"56(),,UI(RK41+($@(%@2"5($K"(=>?(D@55B$"'B5(#@@5+(@A"(A""21($@(%@2"5($K"(20PP"'"A$(

;


17/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( )-

( ;51@(D'4D0B5(0A($K"(D'"B$0@A(@P(=>?1(YB1($K"("N01$"AD"(@P(D'"20$(2"PB45$(1YB#1(@A(;

&@A21(T;!UI(RK01(YB1("11"A$0B5(P@'($Y@('"B1@A1I((c0'1$+($K"'"(Y"'"(A@$("A@4CK(;

$'B20AC($@(D@A1$'4D$($K"(4A2"'560AC(=>?(D@55B$"'B5(#@@51I(=>?1(Y"'"(&"0AC(D@A1$'4D$"2(BA2(

0114"2(0A(C'"B$(a4BA$0$0"1(0A(*,,\(BA2(*,,-I((=@A1"a4"A$56+(B(%B_@'0$6(@P($K"(=>?1m(D@55B$"'B5(

#@@51(Y"'"(16A$K"$0D(;!UI(RK01(5"/"'BC0AC(@P($K"('"B5(;

0AD'"B10AC(161$"%0D('01EI((!"D@A2+($K"(41"(@P(;!(%"BA$($KB$(5"11(DB#0$B5(YB1(A""2"2($@(

D@A1$'4D$($K"(D@55B$"'B5(#@@5I(RK01(PBD050$B$"2($K"('B#02(C'@Y$K(@P(=>?(0114BAD"I(GA(PBD$+(@A"(

'"B1@A(P@'($K"(D'"B$0@A(@P(=>?(1a4B'"2($'41$1(YB1($K"(2"10'"($@(P0ABAD"($K"("a40$6(DB#0$B5(@P(

=>?1(&6(0AD5420AC(=>?("a40$6(0A(B(=>?(1a4B'"2m1(D@55B$"'B5(#@@5I(

(

3.6 Financial Institutions

( RK"(DKBAC"(0A($K"(&BAE('"C45B$@'6(P'B%"Y@'E($@(?(&@A21(@PP"'"2(K0CK"'(60"521($KBA(D@'#@'B$"(&@A21(

Y0$K($K"(1B%"(D'"20$('B$0ACI(RK"(%BABC"'1(Y@'E0AC(0A($K"1"(P0ABAD0B5(0A1$0$4$0@A1(YBA$"2(;;;(

&@A21(T@'(0A/"1$%"A$(C'B2"(&@A21U(Y0$K(K0CK"'(60"521(TBA2('"YB'21U(P@'(k"a40/B5"A$('01EIl(

;5$K@4CK($K"('01E1(Y"'"(A@$('"B556("a40/B5"A$+($K"(0AD"A$0/"1(Y"'"(BCB0A1$(2@0AC(24"(2050C"AD"I(

3.7 The Economy and Central Banks

( ;$($K"("A2(@P(1#'0AC(*,,-+(


18/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( )8

"D@A@%6(@'($K"(P0ABAD0B5(161$"%Il((G$(YB1(/B0A(K@#"+(10AD"(B$($K"(1$B'$(@P(;4C41$($K"(`4'@#"BA(

="A$'B5(


19/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( )7

PB/@'B&5"($"'%1I((RK"6(Y"'"($'60AC($@("AD@4'BC"(@$K"'(&BAE1($@($BE"(B2/BA$BC"(@P($K"(5@Y"'(

201D@4A$('B$"(B$($K"(c"2(Y0A2@YI(

( >4'0AC($K"($K0'2(Y""E(@P(;4C41$+($K"(P50CK$($@(a4B50$6(D@A$0A4"2I(;$($K"(1$B'$(@P($'B20AC(0A(

M"Y(q@'E+($K"(60"52(@A($K"(:(%@A$K(R]&055(YB1(:I7,i+(24'0AC($K"(2B6+(0$(P"55($@(*IV)i+(BA2(&6($K"(

"A2(@P(2B6+(0$(D5@1"2(B$(:I,^iI((O@Y"/"'+(@$K"'(#B'$1(@P($K"(P0N"2(0AD@%"(%B'E"$1(D@A$0A4"2($@(

P4AD$0@A+(Y0$K(0A/"1$%"A$(C'B2"(D@%#BA0"1(01140AC(2"&$L(=@%DB1$(=@'#(1@52(Z!b:(&0550@A(0A(

A@$"1X("B5"'(='"20$(cBD050$6(Te>=cU+(P@'(0A/"1$%"A$(&BAE1(BA2(1"D4'0$0"1(

2"B5"'1($KB$(B55@Y1($K"%($@(41"(B(Y02"('BAC"(@P(1"D4'0$0"1(B1(D@55B$"'B5(P@'(DB1K(5@BA1(P'@%($K"(

c"2I(;%@AC(@$K"'($K0AC1($K"(1"D4'0$0"1(#5"2C"2(&6(2"B5"'1(%41$(KB/"(%B'E"$(#'0D"1(BA2(

k0A/"1$%"A$(C'B2"l(D'"20$('B$0AC1IVV(

3.8 Valuation Uncertainty

( ?A"(@P($K"(D'0$0DB5(0114"1(2'0/0AC($K"(D'0101(KB1(&""A($K"(20PP0D45$6(@P(/B540AC(1$'4D$4'"2(D'"20$(#'@24D$1IV\((GA(B(PB0'(/B54"(BDD@4A$0AC(P'B%"Y@'EV-(BA2(Y0$K(50a402(%B'E"$1+(0$(01(

1$'B0CK$P@'YB'2($@(/B54"(1$BA2B'20F"2(0A1$'4%"A$1+($K@4CK($K"'"(B'"(0114"1(Y0$K(A@A]1$BA2B'2(

0A1$'4%"A$1I((GA($K01(P'B%"Y@'E+($K"'"(B'"($K'""(5"/"51(41"2(P@'(D5B110P60AC($K"($6#"(@P(PB0'(

/B54B$0@A("%#5@6"2L(h"/"5()(o(D5"B'(%B'E"$(#'0D"1XV8(h"/"5(*(o(/B54B$0@A(410AC(#'0D"1(@P('"5B$"2(

0A1$'4%"A$1X(BA2(h"/"5(:(o(#'0D"1(DBAA@$(&"(@&1"'/"2(BA2(%@2"5(#'0D"1(A""2($@(&"(41"2I(c@'(

"NB%#5"+(/B54B$0@A(4A2"'(h"/"5()(DBA(&"(BDK0"/"2(P@'(1$BA2B'2(0A1$'4%"A$1(14DK(B1(D'"20$(2"PB45$(

1YB#1(P@'(Y"55(EA@YA(@&50C@'1I((c@'(B(D'"20$(2"PB45$(1YB#(Y0$K(B(A@A]1$BA2B'2(%B$4'0$6+(20'"D$(

%B'E"$(#'0D"1(DBAA@$(&"(@&1"'/"2I((e'0D"1(@P(D'"20$(1YB#1(P@'($K"(1B%"(@&50C@'(Y0$K(1$BA2B'2(%B$4'0$0"1(DBA(&"(41"2($@(DB50&'B$"(B(/B54B$0@A(%@2"5($@(#'0D"($K"(A@A]1$BA2B'2(%B$4'0$6I((RK01(

Y@452(PB55(4A2"'(h"/"5(*(D5B110P0DB$0@AI((RK"'"(B'"(%BA6(0A1$'4%"A$1($KB$(B'"(A@A]1$BA2B'2(BA2(B'"(

0550a402+(%BE0AC(/B54B$0@A(20PP0D45$I((c@'(14DK(0A1$'4%"A$1+(%@2"5(/B54B$0@A(%41$(&"("%#5@6"2I((

RK01(10$4B$0@A(Y@452(PB55(4A2"'(h"/"5(:(D5B110P0DB$0@AI((cB0$K(0A($K"('"50B&050$6(@P($K"1"(/B54"1(01(

K0CK"1$(P@'(h"/"5()(BA2(5@Y"1$(P@'(h"/"5(:+(YK0DK(01(%@'"(14&_"D$0/"I((RK"'"(B'"(A4%"'@41(


20/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( *,

20PP0D45$0"1(B11@D0B$"2(Y0$K(0%#5"%"A$0AC(PB0'(/B54"(BDD@4A$0AC+("/"A(0A(50a402(%B'E"$1IV7(GA($K"(

P0'1$(a4B'$"'(@P(*,,8+(5"/"5(:(B11"$1(KB/"(0AD'"B1"2(0A(ZI!I(&BAE1I(9@52%BA(!BDK1('"#@'$"2(BA(

0AD'"B1"(@P(^,i(@P($K"1"(B11"$1($@('"BDK(B($@$B5(@P(Z!b7\I^(&0550@A(@P(YK0DK(Z!b*V(&0550@A(B'"(

;


21/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( *)

( RK"(#'@&5"%1(B'010AC(P'@%($K"(/B54B$0@A(@P(D@55B$"'B50F"2(%@'$CBC"(@&50CB$0@A1(

D@A$B0A0AC(14'0%"+(BA2($K"('@550AC(@/"'(@P(B11"$(&BDE"2(D@%%"'D0B5(#B#"'(DB%"($@(B(K"B2(

24'0AC($K"(14%%"'I(;$($K"(&"C0AA0AC(@P(14%%"'+($Y@(@P(


22/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( **

B11"$1I((RK01(BPP"D$"2(%BA6(a4BA$0$B$0/"(K"2C"(P4A21+(14DK(B1(."AB011BAD"(R"DKA@5@C0"1+(YK0DK(

P"55(8I-iI((`NDKBAC"1('B$"1(Y"'"(BPP"D$"2+(B1(P4A21('"24D"2($K"0'(5"/"'BC"I((!"550AC(&6(K"2C"(

P4A21(BA2(A"'/@41(0A/"1$@'1(B51@(P@'D"2(%4A0(&@A2(#'0D"1(2@YAI(

(( ?$K"'(#5B6"'1(Y"'"(BPP"D$"2I((."B5("1$B$"(P4A21(Y"'"(KB'2(K0$(24"($@(&@$K(PB550AC('"B5(

"1$B$"(#'0D"1(BA2($K"($4%45$(0A($K"(D'"20$(%B'E"$1I((RK"(B/"'BC"(P4A2(0A/"1$0AC(#'0%B'056(0A($K"(

ZI!I(5@1$()-I*i(@/"'($K"(P0'1$($K'""(%@A$K1(@P($K"(14%%"'(BA2(Y"'"(2@YA()\IVi(@A($K"(6"B'(

TJ@'A0AC1$B'(GADUI((c4A2('"2"%#$0@A1(KB/"(P@'D"2(%BABC"'1($@(1"55(B11"$1(0A(PB550AC(%B'E"$1I(

[[.(c0ABAD0B5(O@520AC1(hh=+(B('"B5("1$B$"(P0'%+()*i(@YA"2(&6([@K5&"'C+(['B/01(.@&"'$1(Q(=@I(

'"#@'$"2(0A($K"(%0225"(@P(;4C41$($KB$(5@11"1($K'"B$"A(0$1(B&050$6($@('"#B6(Z!bV(&0550@A(0A(1K@'$($"'%(

2"&$I((G$(BAA@4AD"2(#5BA1($@('B01"(Z!bV,,(%0550@A(&6(1"550AC(1KB'"1($@(J@'CBA(!$BA5"6(BA2(

cB'B55@A(=B#0$B5I(((

( J"'C"'(B'&0$'BC"'1(Y"'"(B51@(K0$+(Y0$K(%BA6(&"0AC(P@'D"2($@(4AY0A2(#@10$0@A1($@(@PP1"$(

5@11"1I((RK"(CB#(&"$Y""A(B($B'C"$m1(1$@DE(#'0D"(BA2($K"(#'0D"($K"(&46"'(KB1(BC'""2($@(#B6(Y02"A"2(

$@(\8i(0A(;4C41$+(D@%#B'"2($@(B(1#'"B2(@P())i(B$($K"("A2(@P(34A"(T'"#@'$"2(&6(B(9@52%BA(!BDK1(

BAB56101UI((!@Y@@2(=B#0$B5(JBABC"%"A$(50a402B$"2(#@10$0@A1(0A(B(A4%&"'(@P(#"A20AC(%"'C"'1(BA2(

Y"A$(0A$@(2"PB45$I\:((GA($K"(P0CK$($@(CB0A(2"B51+(&BAE1(KB2(YB0/"2(14DK(#'@/010@A1(B1($K"(k%B'E"$(

@4$l(D5B41"+(YK0DK(B55@Y1(&BAE1($@('"]A"C@$0B$"(BA(4A2"'Y'0$0AC(2"B5(0P(%B'E"$(D@A20$0@A1(KB/"(

2"$"'0@'B$"2I(("#@$(2"5B6"2(BA2('"]A"C@$0B$"2(B(Z!b),I:(&0550@A(2"B5($@(1"55(0$1(D@A1$'4D$0@A(14##56(

&410A"11($@(#'0/B$"("a40$6(P0'%1I(

( ;11"$(&BDE"2(1$'4D$4'"2(#'@24D$1(B'"(20PP0D45$($@(/B54"(P@'(%BA6('"B1@A1I((c0'1$+(01($K"(

C"A"'B5(D@%#5"N0$6(@P($K"(50B&050$6(1$'4D$4'"+($K"(DB1K(P5@Y(YB$"'PB551+(BA2($K"(20PP"'"A$($6#"1(@P(

D@55B$"'B5j0A$"'"1$('B$"($'0CC"'1I(`BDK(1$'4D$4'"(01(4A0a4"(BA2(D@%#4$"'(#'@C'B%1(41"2($@(10%45B$"(

$K"(DB1K(P5@Y1($@($K"(20PP"'"A$(&@A21(%41$(&"($B05@'"2(%B2"($@("BDK($'41$I((!"D@A2+(01($K"(/B54B$0@A(

@P($K"(B11"$1(0A($K"(D@55B$"'B5(#@@5I(c@'(14'0%"(;

$'41$1X(BA2(P@'(=>?(1a4B'"2(1$'4D$4'"1+($K01(0%#50"1($K"(/B54B$0@A(@P(&@A21(0114"2(&6(=>?1I((

=@%#@4A20AC($K"1"(20PP0D45$0"1+(%BA6(@P($K"(B11"$(#@@51(B'"(16A$K"$0D(D'"20$(2"PB45$(1YB#1(@A(

;

D@55B$"'B5(@'($K"(P4$4'"('B$0AC1(@P($K"(D@55B$"'B5(&6($K"(D'"20$('B$0AC(BC"AD0"1I(RK01(D'"B$"1(BA(

B220$0@AB5(5B6"'(@P(D@%#5"N0$6L($@("1$0%B$"($K"(/B54"($@2B6+(0$(01(A"D"11B'6($@("1$0%B$"(/B54"1(0A(

$K"(P4$4'"(@'(#'"20D$(P4$4'"(D'"20$('B$0AC1(@P($K"(D@55B$"'B5I((c@4'$K+(01($K"(1DB'D0$6(@P(2B$B(B&@4$($K"(


23/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( *:

AB$4'"(@P($K"(20PP"'"A$(B11"$(#@@51I((>B$B(@A($K"(B11"$(#@@51(01(414B556(A@$('"B2056(B/B05B&5"(BA2(A@$(

4#2B$"2(@A(B('"C45B'(&B101I(

3.9 Transparency

( RK"'"(B'"(B(A4%&"'(@P(20PP"'"A$(20%"A10@A1(B11@D0B$"2(Y0$K($K"(C"A"'B5(0114"(@P($'BA1#B'"AD6(0A(D'"20$(%B'E"$1I((c0'1$+(01($K"(D@%#5"N(AB$4'"(@P($K"(#'@24D$1(BA2(K@Y($K01(BPP"D$1(

&@$K(#'0D0AC(BA2('01E(B11"11%"A$I((JBA6(4A1@#K01$0DB$"2(0A/"1$@'1(KB/"(41"2(D'"20$('B$0AC1(B1(B(

14PP0D0"A$(%"$'0D(P@'('01E(B11"11%"A$I((?1+(=>?1(

1a4B'"2+(#'0%"+(;5$];(BA2(14'0%"(%@'$CBC"1I((RK01(&B10D($6#"(@P(0AP@'%B$0@A(01('B'"56(B/B05B&5"(

BA2(KB1(#'@24D"2(B(%B'E"$(P@'(5"%@A1(o(T4A1@#K01$0DB$"2U(0A/"1$@'1(B'"(4AB&5"($@(@&1"'/"(@'(

4AY0550AC($@(&"50"/"($KB$(P4A21(KB/"(A@("N#@14'"($@($K"(14'0%"(%B'E"$I((!6AB#1"(D5@1"2(@A"(@P(

0$1(K0CK(C'B2"(P4A21(@A(!"#$"%&"'(:+(*,,-+(D0$0AC(k1"/"'"(0550a4020$6(0A($K"(%B'E"$Il((RK"(

D@%#BA6(1$B$"2($KB$($K"(P4A2(KB2(A@("N#@14'"($@($K"(ZI(!I(14'0%"(%B'E"$I\V(

( c@4'$K+(01(A@$(EA@Y0AC($K"($@$B5(%BCA0$42"(@P($K"(D@%%0$%"A$1(B(P0ABAD0B5(0A1$0$4$0@A(KB1(

C0/"A+(YK"$K"'(0$(&"($@(&BDE(1$@#(50A"1(@P(D'"20$(@'(5@BA(D@%%0$%"A$1($@(#'0/B$"("a40$6(&46@4$1I((;(

/"K0D5"($KB$('"50"1(4#@A(P4A20AC(P'@%+(1B6+($K"(D@%%"'D0B5(#B#"'(%B'E"$+(Y055(&46(B(D@%%0$%"A$(

P'@%(B(P0ABAD0B5(0A1$0$4$0@A($@(#'@/02"(P4A20AC(0A($K"("/"A$(@P(B(%B'E"$(201'4#$0@AI((c0ABAD0B5(

0A1$0$4$0@A1(B51@(@PP"'(50A"1(@P(D'"20$($@(P0'%1+(YK0DK(DBA(&"(2'BYA(2@YA(BA2('"#B02(B$($K"(P0'%m1(

201D'"$0@AI((c45P0550AC(B55(14DK(D@%%0$%"A$1(D@452(KB/"(1"'0@41(0%#BD$(@A(BA(0A1$0$4$0@Am1(


24/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( *^

50a4020$6I((RK"(5"/"5(@P(14DK(D@%%0$%"A$1(01(A@$(EA@YA($@(@4$102"(0A/"1$@'1I\\(((R@(B/@02(K@520AC(

B55($K"(D@%%0$$"2(DB#0$B5+($K"(0A1$0$4$0@A(Y055(#4'DKB1"(B(D@A$'BD$(P'@%(BA@$K"'(0A1$0$4$0@A($@(

#'@/02"(B220$0@AB5(DB#0$B5(0P(A""2"2I((RK01($6#"(@P(D@A$'BD$(01(@P(a4"1$0@AB&5"(/B54"(0P($K"'"(01(B(

%B_@'(%B'E"$(201'4#$0@A+(B1($K"(0A1$0$4$0@A(1"550AC($K"(D@A$'BD$(Y055(B51@(KB/"(0$1(@YA(50a4020$6(

#'@&5"%1I(

( c0P$K+(%@A"6(%B'E"$(P4A21(#'@/02"(B(1BP"(KB/"A(P@'(0A/"1$@'1($@(#B'E($K"0'(%@A"6I\-((GA(

@'2"'($@('"$B0A($K"0'(;;;(5"/"5('B$0AC+($K"6(B'"(C"A"'B556('"1$'0D$"2(P'@%(0A/"1$0AC(0A(5@Y(D'"20$(

C'B2"(1"D4'0$0"1I((GP(BA6(@P($K"0'(K@520AC1(B'"(2@YA]C'B2"2+($K"(P4A2(01(4A2"'(#'"114'"($@(1"55($K"1"(

K@520AC1+(0AD4''0AC(5@11"1I((ZA5"11($K"(P4A2(KB1(14PP0D0"A$(50a4020$6+(0$('01E1(0$1(A"$(B11"$(/B54"(#"'(

1KB'"(PB550AC(&"5@Y(@A"(2@55B'+('"145$0AC(0A(B(k&'"BE0AC($K"(&4DE+l(YK0DK(D@452($'0CC"'(0A/"1$@'1($@(

"N0$($K"(P4A2+(24"($@(D@AD"'A1(B&@4$($K"(1BP"$6(@P($K"0'(0A/"1$%"A$1I((G$(Y@452(B51@(KB'%($K"(

'"#4$B$0@A(@P($K"(P4A2(%BABC"'I((!@%"(@P($K"(%@A"6(%B'E"$(P4A21(KB/"(0A/"1$"2(0A(!GH1I((;(P"Y(

@P($K"1"(!GH1(KB/"(&""A(2@YAC'B2"2+(BA2(@$K"'1(B'"(PBD0AC(2@YAC'B20ACI((JBA6(&BAE1(KB/"(/"'6(

#'@P0$B&5"(%@A"6(%B'E"$(P'BADK01"1(BA2(KB/"(0%#50D0$(D@%%0$%"A$1($@($K"1"(P4A21I((G$(01(0A(B(

&BAEm1(@YA(0A$"'"1$1($@(&46($K"(PB55"A(B11"$1(BA2($@($BE"($K"(5@11+('B$K"'($KBA('01E(B('4A(@A($K"0'(

%@A"6(%B'E"$(P4A21I\8((RK01(01(BA@$K"'(P@'%(@P(D@%%0$%"A$($KB$(01(A@$('"#@'$"2I(

c0AB556+(%BA6(&BAE1(K@52(10%05B'(B11"$1($@($K@1"(K"52(&6(!GH1I((GA($K"(B''BAC"%"A$(

#'@D"11+(B(&BAE(%B6(K@52(@'(YB'"K@41"(B11"$1(4A$05($K"6(DBA(&"(1"D4'0$0F"2(BA2(1@52I((RK"("N$"A$(

@P($K"1"(K@520AC1(01(@P$"A(4AEA@YA($@(0A/"1$@'1+($K@4CK($K"(B%@4A$(@P(h"/"5(:(B11"$1(%0CK$(&"(B(

C402"I((GP(!GH1(B'"(P@'D"2($@(1"55(B11"$1+($K01(Y055(2'0/"($K"(#'0D"1(2@YA(BA2(&BAE1(Y055(&"(P@'D"2($@(

%B'E]$@]%B'E"$(10%05B'(B11"$1(B$($K"(5@Y"'(#'0D"1I((GA/"1$@'1(B'"(4AD"'$B0A(B1($K"(%BCA0$42"(@P(

#@$"A$0B5(5@11"1($K"(&BAE1(%0CK$(&"(PBD0AC(BA2($K01(01(@A"(@P($K"(PBD$@'1(D@A$'0&4$0AC($@(0AD'"B1"2(

/@5B$050$6(0A($K"(1KB'"(#'0D"1(@P(&BAE1I((G$(D@452(DB41"(B(D'"20$(D'4ADK(BA2(BPP"D$($K"(YK@5"(

"D@A@%6I((GA(BA(B$$"%#$($@(B/@02($K01($6#"(@P(1D"AB'0@+(


25/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( *V

$K"(a4B50$6(@P($K"(D@55B$"'B5($@(%0A0%0F"($K"('01E(@P(A@A]#"'P@'%BAD"(&6(&@''@Y"'1I((h"A2"'1(A""2(

B114'BAD"(B1($@($K"(AB$4'"(@P($K"(B11"$1(and($K"0'(/B54"1I((GA($K"(&'"BE2@YA(@P($K"(;


26/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( *\

)I (;(5@Y(0A$"'"1$('B$"("A/0'@A%"A$($KB$(C"A"'B$"2(B(1"B'DK(P@'(60"52("AKBAD"%"A$I(

*I RK"(2"%BA2(P@'(K0CK(60"520AC(B11"$1($@(#4$(0A$@($K"(D@55B$"'B5(#@@51(0A(@'2"'($@(0AD'"B1"($K"(#'@P0$B&050$6(@P(1"D4'0$0FB$0@AI((!4'0%"(%@'$CBC"1(Y"'"(BA(02"B5(DK@0D"+(B5@AC(Y0$K(

B4$@(5@BA1(BA2(D'"20$(DB'21I(

:I J@'$CBC"(@'0C0AB$@'1(202(A@$(B114%"(2"PB45$('01E(@P('01E6(%@'$CBC"(5@BA1I((RK"6(KB2(50$$5"(0AD"A$0/"($@(#"'P@'%(24"(2050C"AD"I((RK"'"(YB1(P'B42(BA2(5BN('"C45B$@'6(@/"'10CK$I(

^I R@('"24D"(DB#0$B5('"a40'"%"A$1+(&BAE1("%#5@6"2(BA(s@'0C0AB$"($@(201$'0&4$"m(%@2"(@P(@#"'B$0@AI((RK"6(KB2(50$$5"(0AD"A$0/"($@(#"'P@'%(24"(2050C"AD"I(

VI RK"("a40$6(K@52"'1(@P(=>?1+(=>?(1a4B'"2+(!GH1+(>e=1(1@52(%BA6(2"'0/B$0/"(D5B0%1I(GA(%BA6(DB1"1($K"(4A2"'560AC(D@55B$"'B5(Y"'"(D'"20$(2"PB45$(1YB#1(Y'0$$"A(@A(B11"$(&BDE"2(

&@A21I((RK01(0%#50"2($KB$(D'"20$(2"PB45$(1YB#1(Y'0$$"A(@A($K"(1B%"(B11"$(D@452(B##"B'(0A(

%BA6(20PP"'"A$(1$'4D$4'"1I((RK01(0AD'"B1"2($K"(161$"%0D('01EI(

\I RK"('B$0AC(BC"AD0"1(202(A@(%@A0$@'0AC(@P($K"('BY(2B$B+("/"A($K@4CK(0$(YB1(D@%%@A(EA@Y5"2C"($KB$(5"A20AC(1$BA2B'21(Y"'"(2"D50A0AC(BA2(P'B42(0AD'"B10ACI(RK01(0%#50"2($KB$(

B114%#$0@A1(41"2($@("1$0%B$"($K"(#'@&B&050$6(@P(2"PB45$+('"D@/"'6('B$"1(BA2(2"PB45$(

2"#"A2"AD"(202(A@$('"P5"D$(D4''"A$(D@A20$0@A1I((

-I .B$0AC(BC"AD0"1(Y"'"($B'26(0A('"D@CA0F0AC($K"(0%#50DB$0@A1(@P($K"(2"D50A0AC(1$B$"(@P($K"(14'0%"(%B'E"$(P@'($K"('B$0AC1(@P(%@A@50A"1I(-)(

8I .B$0AC(BC"AD6(0AD"A$0/"(#'@&5"%(o($K"6(B'"(#B02(&6(D50"A$1(BA2($K"'"(01(50%0$"2(D@%#"$0$0@A(T&6('"C45B$0@AUI((RK"('B$0AC(@P(1$'4D$4'"2(#'@24D$1(KB1(&""A(/"'6(#'@P0$B&5"(

&410A"11(P@'($K"(BC"AD0"1I((

7I J@A@50A"(BDD"#$"2(B$(PBD"(/B54"($K"('B$0AC1(P@'(1"A0@'($'BADK"1(P'@%($K"(BC"AD0"1(BA2(1@52(0A14'BAD"(Y'B#1I(

),IJBABC"%"A$(@P(P0ABAD0B5(0A1$0$4$0@A1(B'"(C0/"A(&@A41"1(&B1"2(@A(1K@'$('4A(#"'P@'%BAD"I((RK"6(KB/"(50$$5"(0AD"A$0/"($@(DB'"(B&@4$($K"(5@AC('4A(D@A1"a4"AD"1(@P($K"0'(BD$0@A1(


27/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( *-

TBC"AD6]1KB'"K@52"'(#'@&5"%UI(hB&@'(%B'E"$1(B'"(A@$(#"'P"D$L(PB054'"+("/"A(1#"D$BD45B'(

PB054'"(01('B'"56(B(&B''0"'($@(C"$$0AC(B(_@&(B$(BA@$K"'(0A1$0$4$0@AI(

))IRK"(A"Y(


28/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( *8

201$'0&4$0@A1(P@'(#@'$P@50@1(@P(B11"$1(BA2($K"(PB054'"(@P($K"(BC"AD0"1($@('"D@CA0F"($K"(50%0$B$0@A1(@P(

$K"0'(%@2"51(0A(B($0%"56(%BAA"'I(((

( .B$0AC(BC"AD0"1(KB/"(B(5@AC(K01$@'6(@P("1$0%B$0AC($K"(#'@&B&050$6(@P(2"PB45$(BA2($K"(5@11(

C0/"A(2"PB45$(P@'(0A20/024B5(@&50CB$0@A1I(RK01(01(A@$($K"(DB1"(P@'(1$'4D$4'"2(#'@24D$1+(YK"'"($K"'"(

B'"(%BA6(B220$0@AB5(20PP0D45$(0114"1I((;1(201D411"2(&6(;1DKD'BP$(BA2(!DK"'%BAA(T*,,-U(14'0%"(

;

P5@Y1(P'@%(B(#@'$P@50@(@P(D@''"5B$"2(B11"$1I(RK41+($K"('B$0AC(@P(=>?($'BADK"1('"50"1(K"B/056(@A(

a4BA$0$B$0/"(%@2"51(YK05"(D@'#@'B$"(2"&$('B$0AC1('"56("11"A$0B556(@A($K"(BAB561$(_42C%"A$I(dK05"(

$K"('B$0AC(@P(B(=>?($'BADK"(1K@452(KB/"($K"(1B%"("N#"D$"2(5@11(B1(B(D@'#@'B$"(&@A2(P@'(B(C0/"A(

'B$0AC+($K"(/@5B$050$6(@P(5@11+($KB$(01+($K"(4A"N#"D$"2(5@11+(01(a40$"(20PP"'"A$(BA2(1$'@AC56(2"#"A21(@A(

$K"(D@''"5B$0@A(1$'4D$4'"(@P($K"(4A2"'560AC(B11"$1(0A($K"(#@@5(@P($K"(=>?I((

c@'(1$'4D$4'"2(#'@24D$1+(14DK(B1(;

B%@AC($K"(B11"$1(0A($K"(=>?(BA2($@("1$0%B$"($K"(#B'B%"$"'1(2"1D'0&0AC($K"(2"#"A2"AD"I-:((?/"'(

$K"(50P"(@P(B(=>?+(0A20/024B5(2"PB45$1(%B6(@DD4'(B$(BA6($0%"+(0%#560AC($KB$(0$(01(A"D"11B'6($@(

%@2"5($K"(5@11(201$'0&4$0@A(@/"'($0%"I(RK01(A"D"110$B$"1(%@2"50AC($K"("/@54$0@A(@P($K"(20PP"'"A$(

PBD$@'1($KB$(BPP"D$($K"(2"PB45$(#'@D"11(BA2(K@Y($K"1"(PBD$@'1("/@5/"($@C"$K"'I-^((RK01('"a40'"1(

B114%#$0@A1(B&@4$($K"(1$@DKB1$0D(#'@D"11"1($KB$(2"1D'0&"($K"("/@54$0@A(@P($K"(20PP"'"A$(PBD$@'1+(

14DK(B1(0A$"'"1$('B$"1(BA2(#'"#B6%"A$(&"KB/0@'+(BA2($K"("1$0%B$0@A(@P($K"(#B'B%"$"'1(2"1D'0&0AC(

$K"1"(#'@D"11"1+(YK0DK(414B556('"a40'"1($K"(41"(@P($0%"(1"'0"1(2B$BI((GP($K"'"(B'"(%B_@'(DKBAC"1(0A(

$K"("D@A@%6+($K"A($K"1"(#B'B%"$"'1(%B6(DKBAC"+(0%#560AC($KB$(0$(01(A"D"11B'6($@("NB%0A"($K"(

1"A10$0/0$6(@P(B('B$0AC(%"$K@2@5@C6($@(#B'B%"$"'(DKBAC"1I(((

G$(01(D'0$0DB5($@(B11"11($K"(1"A10$0/0$6(@P($'BADK"('B$0AC1($@(B(10CA0P0DBA$(2"$"'0@'B$0@A(0A(

D'"20$(D@A20$0@A1(BPP"D$0AC(D'"20$(Y@'$K0A"11(BA2(2"PB45$(D541$"'0ACI(;1(1K@YA(0A(c"A2"'+(RB'B1K"/(

BA2(rK4(T*,,8U($K"(0%#BD$(@P(1K@DE1(BPP"D$0AC(D'"20$(Y@'$K0A"11(@A(=>?($'BADK"('B$0AC1(01(/"'6(

20PP"'"A$($KBA(P@'(B(D@'#@'B$"(&@A2I(G$(2"#"A21(D'0$0DB556(@A($K"(%BCA0$42"(BA2($K"(D541$"'0AC(@P($K"(1K@DE1(BA2(0$($"A21($@(&"(A@A]50A"B'I(

GP(2"PB45$(@DD4'1+(0$(01(A"D"11B'6($@("1$0%B$"($K"('"145$0AC(5@11I((d"(EA@Y(P'@%($K"(Y@'E(@P(

;DKB'6B("$(B5(T*,,:U(BA2(;5$%BA("$(B5(T*,,VU($KB$('"D@/"'6('B$"1(2"#"A2(@A($K"(1$B$"(@P($K"(

"D@A@%6+($K"(D@A20$0@A(@P($K"(@&50C@'(BA2($K"(/B54"(@P(0$1(B11"$1I((h@11('B$"1(BA2($K"(P'"a4"AD6(@P(

2"PB45$1(B'"(2"#"A2"A$(TD@''"5B$"2UL(0P($K"("D@A@%6(C@"1(0A$@('"D"110@A+($K"(P'"a4"AD6(@P(2"PB45$1(


29/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( *7

BA2(5@11('B$"1(0AD'"B1"I(G$(01(A"D"11B'6($@(%@2"5($K"(PBD$@'1($KB$(BPP"D$($K"(5@11(BA2($K"(_@0A$(

2"#"A2"AD"(&"$Y""A($K"(P'"a4"AD6(@P(2"PB45$(BA2(5@11I(RK"(5"/"5(@P(2"#"A2"AD"(Y055(/B'6+(0A(

C"A"'B5+(Y0$K($K"(1$B$"(@P($K"("D@A@%6I((

R@(KB/"(D@AP02"AD"(0A(B(%@2"5+(0$(01(A"D"11B'6($@(KB/"(B(D5"B'(2"P0A0$0@A(@P(YKB$(B('B$0AC(

%"BA1(P@'(B(#B'$0D45B'($6#"(@P(0A1$'4%"A$+($K"(PBD$@'1($KB$(BA(BC"AD6(D@A102"'1(YK"A(B110CA0AC(B(

'B$0AC(BA2($K"(K@Y(Y"55(B('B$0AC(%@2"5(#"'P@'%1(0A(20PP"'"A$("D@A@%0D("A/0'@A%"A$1I((RK"'"(01(B(

5BDE(@P(D5B'0$6(B&@4$(YKB$(2@"1(B('B$0AC(BD$4B556(%"B14'"I-V((G1(0$(B(%"B14'"(@P($K"(#'@&B&050$6(@P(

2"PB45$(@'($K"("N#"D$"2(5@11(@/"'(1@%"(1#"D0P0"2(K@'0F@An(dKB$(01($K"(5"AC$K(@P($K"(K@'0F@An(>@"1(

B('B$0AC+(1B6(


30/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( :,

%"$K@2@5@C0"1($@($K"(4A2"'560AC(B114%#$0@A1I((=4''"A$(%"$K@2@5@C0"1(PB05"2(24"($@($K"(41"(@P(

0AB##'@#'0B$"(B114%#$0@A1(2"'0/"2(P'@%(K01$@'0D(2B$B(P@'(D@'#@'B$"(=>?1(Y0$K($'BADK"1(%4DK(

Y02"'($KBA(P@'(;?1I((RK"6(B51@(PB05"2($@(B##'@#'0B$"56(%@2"5(&@$K(2"PB45$(BA2('"D@/"'6(

2"#"A2"AD"1I((

( R@('B$"($K"(D@%%"'D0B5(#B#"'(@P(B(!GH+($K"'"(B'"(B220$0@AB5(PBD$@'1($@(D@A102"'I((c0'1$(01(BA(

B11"11%"A$(@P($K"(&BDE1$@#(50A"1(@P(14##@'$(BA2(@$K"'(D@A$0AC"A$(P4A20AC(0A($K"(DB1"(@P(%B'E"$(

201'4#$0@A1I((RK"('B$0AC(BC"AD0"1('B$"($K"(D@A$0AC"A$(1@4'D"1(@P(P4A20AC(B/B05B&5"($@(B(/"K0D5"I((

!"D@A2+(P@'(BA(0A/"1$@'($@(&46(B11"$(&BDE"2(D@%%"'D0B5(#B#"'(T;


31/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( :)

a4BA$0$B$0/"(BA2(a4B50$B$0/"(PBD$@'1I((RK"(a4BA$0$B$0/"(#B'$(@P($K"('B$0AC(1K@452(&"(

'"#'@24D0&5"(&6(BA(0A2"#"A2"A$(#B'$6I(

RK"(B&050$6($@(0A2"#"A2"A$56(/B502B$"(B('B$0AC(Y@452(C@(B(5@AC(YB6($@('"24D"($K"("PP"D$1(@P(

D@AP50D$1(@P(0A$"'"1$I(GA2"#"A2"A$(/B502B$0@A('"a40'"1($KB$(2B$B(&"(B/B05B&5"I(d"(B22'"11($K01(0114"(

0A($K"(A"N$('"D@%%"A2B$0@AI(

:I c@'(B11"$(&BDE"2(1"D4'0$0"1+($K"(C@/"'A%"A$(1K@452(1#@A1@'(BA(BC"AD6($KB$(D@55"D$1(0AP@'%B$0@A(@A(B($0%"56(&B101(B&@4$($K"(D@55B$"'B5(#@@51(BA2(%BE"(0$(B/B05B&5"($@(%B'E"$(

#B'$0D0#BA$1I((RK01(Y055(PBD050$B$"(BA(0A2"#"A2"A$(#B'$6m1(B&050$6($@('"#'@24D"($K"(D'"20$(

'B$0AC1I(

^I =5B'0$6(01('"a40'"2(B&@4$($K"(2B$B(1@4'D"1(41"2($@('"BDK(B('B$0ACI((G1($K"(BC"AD6(BDD"#$0AC(2B$B(P'@%(B($K0'2(#B'$6(BA2(KB1($K"(BC"AD6(2@A"(BA6$K0AC($@(DK"DE(0P($K"'"(KB/"(&""A(

1$'4D$4'B5(DKBAC"1(0A($K"(2B$B(1@4'D"1n((OB1(0$(DK"DE"2($K"(2B$B($@(_41$0P6($K"(/B5020$6(@P(

0$1(201$'0&4$0@AB5(B114%#$0@A1n(

4.2 Valuation(

( GA($K"(D4''"A$(D'0101+(@A"(@P($K"(P4A2B%"A$B5(#'@&5"%1(01($K"(/B54B$0@A(@P($K"(1"D4'0$0F"2(

$'BADK"1(P@'(%@'$CBC"(B11"$1I((R@(/B54"(B(10%#5"(D'"20$(2"PB45$(1YB#('"a40'"1(1#"D0P0DB$0@A(@P($K"(

#'@&B&050$6(@P(2"PB45$(@P($K"(@&50C@'(@/"'($K"(50P"(@P($K"(1YB#(BA2($K"(5@11(0P(2"PB45$(@DD4'1I((RK"1"(

#'@&B&050$0"1(BA2(5@11('B$"1(B'"(A@$($K@1"("1$0%B$"2(&6('B$0AC(BC"AD0"1I((c@'(#'0D0AC(#4'#@1"1+(Y"(

A""2($K"(price of risk(P@'("BDK(PBD$@'($KB$(BPP"D$1($K"(5@11(201$'0&4$0@AI((RK"(#'0D"(@P('01E(P@'(B(

PBD$@'('"5B$"1($K"('01E(@P(5@11($@(/B54"I((JB'E"$(#'0D"1(P@'(1YB#1(Y0$K(1$BA2B'20F"2(%B$4'0$0"1(@P(

@A"+($K'""+(P0/"+(1"/"A(BA2($"A(6"B'1(A@Y("N01$(P@'(B(5B'C"(A4%&"'(@P(@&50C@'1+($K@4CK($K"(%B'E"$(

P@'(A@A]1$BA2B'20F"2(%B$4'0$0"1(01(1$055(0550a402I((RK"("N01$"AD"(@P(%B'E"$(#'0D"1(%"BA1($KB$(%@2"51(

DBA(&"(DB50&'B$"2($@(%B$DK(D4''"A$(#'0D"1I(?AD"(Y"(DBA(0AP"'(#'0D"1(@P('01E(P@'(B(#B'$0D45B'(@&50C@'+(

Y"(DBA(#'0D"(A@A]1$BA2B'2(1YB#1(Y'0$$"A(@A($K"(1B%"(@&50C@'I(

c@'(16A$K"$0D(=>?1+-7(/B54B$0@A(&"D@%"1(%@'"(D@%#50DB$"2+(B1(0$(01(A"D"11B'6($@(%@2"5(

2"PB45$(BA2('"D@/"'6(2"#"A2"AD"1(B%@AC($K"(@&50C@'1(0A($K"(=>?I((c@'("BDK(D'"20$(2"PB45$(1YB#(

Y0$K0A($K"(1$'4D$4'"+($K"(#'@&B&050$0"1(@P(2"PB45$(@/"'($K"(50P"(@P($K"(=>?(B'"(0AP"''"2(410AC($K"(

D4''"A$(%B'E"$(#'0D"1(P@'(B55($K"(1YB#1(@A($K"(#B'$0D45B'(@&50C@'I((G$(01(A"D"11B'6($@(#B$DK($@C"$K"'(

$K"(0A20/024B5(D'"20$(1YB#1($@(#'@24D"(B(#'0D"(P@'($K"(YK@5"(1$'4D$4'"I((RK"($6#0DB5($6#"1(@P(

%@2"51(41"2(&6(P0ABAD0B5(0A1$0$4$0@A1(B'"('"5B$0/"56(10%#5"(BA2(1$B$0D(0A(AB$4'"+8,(BA2(2@(B(

'"5B$0/"56(#@@'(_@&(@P(#'0D0AC(B55(@P($K"(20PP"'"A$($'BADK"1I((R'BA1#B'"AD6(0A(#'0D0AC(BA2($K"(

50a4020$6(@P($K"(%B'E"$(KB1(C'"B$56(0AD'"B1"2(P@55@Y0AC($K"(0A$'@24D$0@A(@P(D'"20$(0A20D"1(BA2($K"(

$'B20AC(@P($'BADK"1(Y'0$$"A(@A($K"(0A20D"1I((RK01(KB1(B51@(PBD050$B$"2(%@2"51($@(&"(DB50&'B$"2($@($K"(


32/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( :*

#'0D"1(@P($K"(0A20/024B5($'BADK"1(@P(BA(0A2"NI((O@Y"/"'+(P@'(16A$K"$0D(=>?1($KB$(2@(A@$(D@A$B0A(

$K"(1B%"(@&50C@'1(B1(0A(BA(0A2"N+(B220$0@AB5(B114%#$0@A1(B'"('"a40'"2(P@'(#'0D0ACI(

c@'(#'0D0AC(B11"$1(14DK(B1(%@'$CBC"1+(B4$@]5@BA1(@'(D'"20$(DB'21+($K"(20PP0D45$0"1(B11@D0B$"2(

Y0$K(/B54B$0@A(C'"B$56(0AD'"B1"+(B1($K"'"(B'"(P"Y(#'0D"1($KB$(DBA(&"(41"2(P@'(DB50&'B$0@AI(((`/"A(

4A2"'(A@'%B5(D@A20$0@A1+(%B'E"$1(B'"(0550a402I((RK"($6#"1(@P(%@2"51(41"2($@("1$0%B$"($K"(D'"20$(

'B$0AC1(@P(=J?1(D@452(&"("N$"A2"2($@(#'0D0ACI((RK01(DBA(&"(BDK0"/"2(&6("1$0%B$0AC($K"(#'0D"1(@P(

'01E(B11@D0B$"2(Y0$K("BDK(PBD$@'($KB$(BPP"D$1(2"PB45$(BA2($K"('"145$0AC(5@11I((O@Y"/"'+($K01('"a40'"1(

%B'E"$(#'0D"1I((J@'$CBC"('"5B$"2(D'"20$(0A20D"1(A@Y("N01$+(B55@Y0AC($K"(#'0D"1(@P('01E($@(&"(

"1$0%B$"2I(((ZAP@'$4AB$"56+(%@'$CBC"(#@'$P@50@1(%B6(20PP"'(14&1$BA$0B556(P'@%($K"(DKB'BD$"'01$0D1(

@P($K"(0A2"N+(B1($K"'"(01(Y02"(K"$"'@C"A"0$6(BD'@11(20PP"'"A$($6#"1(@P(%@'$CBC"1I((!$BA2B'20FB$0@A(

@P(1$'4D$4'"1(Y055(K"5#($@(0%#'@/"(50a4020$6(BA2(#'0D0AC+(B1('"D"A$56(14CC"1$"2(&6(hBCB'2"(

T*,,-U+8)($K@4CK($K"'"(B'"(%BA6(#'BD$0DB5(20PP0D45$0"1(Y0$K($K01($6#"(@P(14CC"1$0@AI((GP(#'0D"1(@P('01E(

DBAA@$(&"("1$0%B$"2+(BA@$K"'(B##'@BDK(01($@(41"($K"(D'"20$('B$0AC(P@'($K"(%@'$CBC"(1$'4D$4'"(BA2(

$K"A(%BE"(1@%"(K"'@0D(B114%#$0@A(B&@4$(YKB$(60"52(BA(B11"$(Y0$K(B(C0/"A('B$0AC(D@%%BA21I((RK"(

41"(@P($K01($6#"(@P(%@2"5(KB1(%"BA$($KB$(0A($K"(D4''"A$(D'0101+(B1('B$0AC(BC"AD0"1(KB/"(2@YA]C'B2"2(

B11"$1+($K"'"(KB/"(&""A(B4$@%B$0D(Y'0$"]2@YA1I((RK"'"(B'"($Y@(20PP0D45$0"1(Y0$K($K01(B##'@BDKI((G$(

B114%"1($KB$('B$0AC1(B'"(&@$K(BDD4'B$"(BA2($0%"56I((RK"(1"D@A2(20PP0D45$6(01($K"(AB$4'"(@P($K"(

'"a40'"2(K"'@0D(B114%#$0@A1I((;#B'$(P'@%(#'BC%B$01%+($K"'"(01(50$$5"(_41$0P0DB$0@A(

Recommendations

)I RK"'"(01(B(A""2(P@'($K"(10%#50P0DB$0@A(BA2(1$BA2B'20FB$0@A(@P(0A1$'4%"A$1I(JBA6(0A1$'4%"A$1(KB/"(&"D@%"($@@(D@%#50DB$"2+(%BE0AC('"50B&5"(#'0D0AC(@'('01E(%BABC"%"A$(

#'@&5"%B$0DI(

*I c@'(%BA6(20PP"'"A$(B11"$(D5B11"1+($K"(0A241$'6(A""21($@(2"/"5@#(%B'E"$1(P@'(0A20D"1(Y'0$$"A(@A(1$BA2B'20F"2(B11"$1I((RK01(Y055(K"5#(0A(#'0D"(201D@/"'6(BA2(P@'(#'0D0AC('"5B$"2(

B11"$1I(

4.3 Transparency(

RK"(5BDE(@P($'BA1#B'"AD6(KB1(BPP"D$"2(P0ABAD0B5(0A1$0$4$0@A1(0A(B(A4%&"'(@P(20PP"'"A$(YB61I((c0'1$+(&BAE1(K@52(@'(B'"(YB'"K@410AC(%@'$CBC"1(&"P@'"(1"D4'0$0FB$0@A+(B1(Y"55(B1($'BADK"1(@P(

1$'4D$4'B5(#'@24D$1($KB$($K"6(B'"(0A($K"(#'@D"11(@P(1"550AC($@(0A/"1$@'1I((GA($K"(D'"20$(D'0101+(B1($K"(

/B54"(@P(D'"20$(1"A10$0/"(0A1$'4%"A$1(KB1(2"D50A"2+(P0ABAD0B5(0A1$0$4$0@A1(KB/"(&""A(P@'D"2($@(Y'0$"(

2@YA($K"(/B54"(@P($K"1"(B11"$1I((GA(%BA6(DB1"1+(0A/"1$@'1(KB/"(&""A(14'#'01"2(&6($K"(%BCA0$42"(@P(

$K"(Y'0$"]2@YA1I((


33/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( ::

!"D@A2+(01($K"(5"/"5(BA2(20/"'10$6(@P(D@%%0$%"A$1+(&@$K("N#50D0$(BA2(0%#50D0$+(C0/"A(&6(

&BAE1I((RK"(P0'1$("N#50D0$($6#"(@P(D@%%0$%"A$(01($KB$($@(4A2"'Y'0$"(5"/"'"2(&46@4$1I((c@'($K"(P0'1$(

#B'$(@P(*,,-+($K"(D@%#"$0$0@A(YB1(14DK($KB$(%BA6(&BAE1(@PP"'"2($@(#'@/02"(P0ABAD0AC+(Y0$K@4$($K"(

#'@$"D$0@A(@P(BA(B2/"'1"(%B'E"$(D5B41"($KB$(C0/"1($K"%(BA("1DB#"('@4$"I((RK"($@$B5(%BCA0$42"(@P(

$K"1"(D@%%0$%"A$1(YB1(@P$"A(A@$(201D5@1"2(@A(B($0%"56(&B101I((RK"(1"D@A2($6#"(@P("N#50D0$(

D@%%0$%"A$(@DD4''"2(YK"A(&BAE1(CB/"(&BDE1$@#(50A"1(@P(D'"20$($@($K"0'(1#@A1@'"2(!GH1I((;(&BAE(

Y055(@P$"A(#'@/02"(B(&BDE1$@#(50A"(@P(D'"20$+(414B556(P@'(B(P'BD$0@A(@P($K"($@$B5(B%@4A$($K"(/"K0D5"(

A""21I((RK"'"(01(B(5BDE(@P(D5B'0$6(B1($@($K"($@$B5(5"/"5(@P($K"1"(D@%%0$%"A$1(BA2(B(&BAEm1(B&050$6($@(

K@A@'(14DK(D@%%0$%"A$1I(

RK"(P0'1$($6#"(@P(0%#50D0$(D@%%0$%"A$(B'@1"(&"DB41"(@P('"#4$B$0@A(D@AD"'A1I(


34/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( :^

2"/"5@#%"A$(@P(14DK(0A20D"1+8*($K@4CK(0A(1@%"(DB1"1+($K"(B11"$(1$'4D$4'"1(41"2($@(2"P0A"($K"(

4A2"'560AC(B11"$1(0A($K"(0A2"N(5BDE($'BA1#B'"AD6I(RK"'"(01(B(A""2(P@'(%@'"(10%#50D0$6(BA2(

$'BA1#B'"AD6(0A(2"10CAI(

Recommendations(

)I c@'(&BAE1($K"'"(01($K"(A""2(P@'($'BA1#B'"AD6(B1($@($K"(%BCA0$42"(@P("N#50D0$(D@%%0$%"A$1(B'010AC(P'@%(50A"1(@P(D'"20$+(&BDE1$@#(14##@'$1+(BA2(P4A20AC(P@'(5"/"'"2(&46@4$1I(

*I c@'(&BAE1($K"'"(01($K"(A""2(P@'($'BA1#B'"AD6(B1($@($K"(%BCA0$42"(@P(0%#50D0$(D@%%0$%"A$1($KB$(B'01"(P'@%('"#4$B$0@A(D@AD"'A1I(`NB%#5"1(B'"($K"(0%#50D0$(D@%%0$%"A$1($@(@PP(

&B5BAD"(1K""$(/"K0D5"1(BA2("AKBAD"2(%@A"6(%B'E"$(P4A21I(;(&BAE(1K@452(1$B$"(0A(0$1(

BAA4B5('"#@'$($K"(D@A1"a4"AD"1(@P(&'0AC(&BDE(@A$@(0$1(&B5BAD"(1K""$(0$1(@PP]&B5BAD"(

/"K0D5"1I(RK01(Y@452(K"5#('"24D"($K"(0AP@'%B$0@A(B16%%"$'6I(

:I RK"'"(01($K"(A""2(P@'(C'"B$"'($'BA1#B'"AD6(Y0$K('"1#"D$($@($K"(AB$4'"(@P(B11"$1(K"52(&6(P0ABAD0B5(0A1$0$4$0@A1+("1#"D0B556(B11"$1($KB$(B'"(20PP0D45$($@(/B54"(T5"/"5($K'""(B11"$1UI(

(

4.4 Instrument Design(

RK"(5BDE(@P($'BA1#B'"AD6(BA2(50a4020$6(P@'(%BA6(B11"$(&BDE"2(1"D4'0$0"1(14DK(B1(14'0%"(

%@'$CBC"1+(B4$@]5@BA1(BA2(%@'"("N@$0D(=>?(1a4B'"2(1"D4'0$0"1(KB/"(&""A(B(%B_@'(0114"(0A($K"(

D4''"A$(D'0101I(GA($K"(A"B'(P4$4'"+(Y"(DBA("N#"D$(0A/"1$@'1($@(P@D41(@A('"5B$0/"56(10%#5"(BA2(50a402(

#'@24D$1($KB$(DBA(&"("B1056(1$BA2B'20F"2(BA2(/B54"2I(

RK"(0A$'@24D$0@A(@P(D'"20$(2"PB45$(1YB#(0A20D"1(0A(5B$"(*,,*("AKBAD"2($K"(2"/"5@#%"A$(@P(

$K"(D'"20$(1YB#(%B'E"$(&6(0%#'@/0AC($K"($'BA1#B'"AD6I((GA/"1$@'1(D@452(@&1"'/"(&02jB1E(1#'"B21(

P@'($K"(20PP"'"A$($'BADK"1(@A($K"(0A2"NI(GA20D"1+(14DK(B1($K"(;?UI((


35/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( :V

5"/"'BC"2(0A/"1$%"A$1(YK@1"('"$4'A(2"#"A21(@A($K"(#"'P@'%BAD"(@P(BA(4A2"'560AC($'B20AC(

1$'B$"C6I(u40$"(@P$"A(#@10$0@A1(B'"($BE"A(0A$@($K"(B/B05B&5"(D'"20$(0A20D"1(14DK(B1(0R'BNN(BA2(=>tI((

R6#0DB556+($K"(#"'P@'%BAD"(@P($K"1"($'B20AC(1$'B$"C0"1(01("N#@1"2($@(kCB#l('01E($KB$(01(A@$(DB#$4'"2(

Y0$K($'B20$0@AB5(@#$0@A(#'0D0AC(%@2"51(&"DB41"(@P($K"(D@A$0A4@41(#B$K1(@P($K"(?(&B1"2(@A(P0ABAD0B5(D'"20$1(P'@%(Z

5@1$(7,(#"'D"A$(@P(0$1(/B54"(BP$"'(0$1(A"$(B11"$(/B54"(P"55(&"5@Y($K"(5"/"5($KB$($'0CC"'"2(0$1(4AY0A2I(

J@@26m1(5B$"'(@A(D4$($K"('B$0AC(@P($K"(@$K"'(=e>?1I8^(

!GH1(Y"'"(P4A20AC(%"204%]$"'%(BA2(KB'2]$@]/B54"(B11"$1(Y0$K(1K@'$]$"'%(%@A"6(%B'E"$(

1"D4'0$0"1("N#@10AC($K"(/"K0D5"($@($K"('01E(@P(B(%B'E"$(201'4#$0@AI8V(dK"A(&BAE1(Y"'"(4AB&5"($@(

'@55($K"(;


36/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( :\

BA2(D@@'20AB$0@A(BD'@11('"C45B$@'6(&@20"1(B$($K"(AB$0@AB5(BA2(0A$"'AB$0@AB5(5"/"51I(;%@AC($K"(

#'@#@1B51(B'"(0AD'"B1"2(DB#0$B5('"a40'"%"A$1(P@'(1$'4D$4'"2(D'"20$(#'@24D$1(BA2($K"($'B20AC(&@@E($@(

"N#50D0$56(DB#$4'"(2"PB45$(BA2("/"A$('01E(@P(D'"20$("N#@14'"1(K"52(0A($K"($'B20AC(&@@E+(PB1$"'(

201D5@14'"(@P(5@11"1(&6(&BAE1(BA2(0AD'"B1"2(D'@11]&@'2"'(%@A0$@'0AC(@P(&BAE1(&6('"C45B$@'1I(

O@Y"/"'+($K"'"(B'"(B(A4%&"'(@P(0114"1(B$($K"(K"B'$(@P($K"(D4''"A$(D'"20$(D'0101($KB$(A""2(BA(4'C"A$(

'"C45B$@'6('"1#@A1"I(((

c0'1$+($K"(5BN(5"A20AC(1$BA2B'21(@/"'($K"(5B1$(P"Y(6"B'1(KB/"(&""A(B(%B_@'(D@A$'0&4$@'($@(

$K"(D4''"A$(D'0101I(


37/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( :-

'B$0AC(BC"AD0"1(KB/"(2@A"(B(#@@'(_@&(0A(B11"110AC(@A(B($0%"56(&B101($K"(D'"20$(Y@'$K0A"11(@P(%BA6(

@P($K"(D@4A$"'#B'$0"1(BA2($K"(/B54B$0@A(@P(0550a402(B11"$1(01(20PP0D45$("/"A(0A(A@'%B5($0%"1I(


38/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( :8

0AD'"B10AC56(D@AD"'A"2(B&@4$($K"(D'"20$(Y@'$K0A"11(@P(P0ABAD0B5(0A1$0$4$0@A1+(YK0DK(KB/"(&""A(

P@'D"2($@('B01"(DB#0$B5(B$(4APB/@'B&5"(#'0D"1I8-(((

RK"(/B54B$0@A(@P(0550a402(B11"$1(01(20PP0D45$(4A2"'(A@'%B5(%B'E"$1(D@A20$0@A1(BA2(

#'@&5"%B$0D(YK"A(%B'E"$1(B'"(0A($4'%@05I(GA($K"(D4''"A$(D'0101+($K"'"(YB1(B(PB054'"($@(B2_41$(

201$'0&4$0@AB5(B114%#$0@A1(24"($@(%01'"#'"1"A$B$0@A(@P($K"(4A2"'560AC('01E(B11@D0B$"2(Y0$K(

14'0%"(&@''@Y"'1I(c@'(B11"$1('"D@'2"2(0A($K"(&BAE0AC(&@@E+(B(5@11('"1"'/"(01('"a40'"2I((RK"(

%BCA0$42"(@P($K"('"1"'/"(01(414B556(&B1"2(@A($K"("N#"D$"2(5@11(@/"'($K"(A"N$(6"B'I((GA(C"A"'B5+(0A(

$K"(D4''"A$(D'0101($K01(KB1(&""A(4A2"'("1$0%B$"2+(C0/"A($K"(0AB##'@#'0B$"(201$'0&4$0@AB5(

B114%#$0@A1I((GP(%B'E"$1(B'"(%01#'0D0AC(B11"$1(0A($K"(D4''"A$(D'0101+(0$(01(#'@&B&56(24"($@($K"(5BDE(@P(

$'BA1#B'"AD6(Y0$K('"1#"D$($@($K"(AB$4'"(@P($K"(B11"$1I((GA/"1$@'1(A""2($@(B11"11($K"(/B54"(@P(BA(

0A1$0$4$0@Am1(B11"$1I((RK"(P@D41(@P($K"(2"&B$"(1K@452(&"(@A($K"(0114"1(@P($'BA1#B'"AD6(@P($K"(B11"$1(

K"52(&6(0A1$0$4$0@A1(BA2($K"(/B54B$0@A(@P($K"1"(B11"$1I(((

c0P$K+($K"(161$"%0D(AB$4'"(@P($K"(D'0101(KB1(B'01"A(&"DB41"(@P(Y02"1#'"B2(@YA"'1K0#(@P(

1$'4D$4'"1(D@A$B0A0AC(14'0%"(BA2($K"(D0'D45B'(2"#"A2"AD"(&"$Y""A('"P0ABAD0AC(BA2(D@55B$"'B5(

/B54B$0@AI((."C45B$@'1(PB05"2($@('"D@CA0F"($K"("N01$"AD"(@P(#@10$0/"(P""2&BDE(%"DKBA01%1(BA2($@(

4A2"'1$BA2($K"0'(0%#50DB$0@A1(P@'($K"(P0ABAD0B5(161$"%I88((GP(B11"$(/B54"1(2"D50A"+(B&050$6($@(

'"P0ABAD"(2"D50A"1+(/B54B$0@A(@P(D@4A$"'#B'$6(D@55B$"'B5(2"D50A"1+($K"(/B54"(@P(%@A@50A"(B11"$1(

2"D50A"1(BA2($K"(/B54"(@P($K"(C4B'BA$""1(C0/"A(&6(%@A@50A"1(2"D50A"1I((."C45B$@'1(Y"'"(&50A2($@(

$K"(0%#"A20AC(D'0101I((R@(B/@02(B('"#"B$+($K"'"(A""21($@(&"(%@'"($'BA1#B'"AD6(B1($@($K"(AB$4'"(@P(

B11"$1(K"52(&6(20PP"'"A$(0A1$0$4$0@A1I((R@(BDK0"/"($K01(Y055('"a40'"(0AD'"B1"2(D@@#"'B$0@A(@P(

'"C45B$@'1(BD'@11(AB$0@AB5(&@4A2B'0"1I((RK"'"(01(B51@($K"(A""2($@('"D@CA0F"(P""2&BDE(%"DKBA01%1(

"N#50D0$56(BA2(4A2"'1$BA2($K"0'(0%#50DB$0@A1(P@'($K"(P0ABAD0B5(161$"%I(

JBA6(P0ABAD0B5(0A1$0$4$0@A1(PB05"2($@(BA$0D0#B$"($K"(50a4020$6('01E1(B11@D0B$"2(Y0$K(1@%"(@P(

$K"0'(&410A"11"1I((."C45B$@'1(A""2($@(4A2"'1$BA2($K"('01E1($KB$(DBA(&"(DB41"2(&6(50a4020$6(BA2(

'"a40'"($KB$($K"1"('01E1(&"(P@'%B556('"D@CA0F"2(0A(%"B14'0AC($K"('01E(@P(BA(0A1$0$4$0@AI((

.B$0AC(BC"AD0"1(PB05"2($@(4A2"'1$BA2($K"('01E1(B'010AC(P'@%(1$'4D$4'"2(#'@24D$1I(90/"A($K"(

'"C45B$@'6(0%#@'$BAD"(B$$BDK"2($@('B$0AC1+($K"(@A41(01(@A('"C45B$@'1($@(%@A0$@'($K"('B$0AC(BC"AD0"1(

Y0$K('"1#"D$($@(2B$B(a4B50$6+(%"$K@2@5@C0"1(BA2('B$0AC(2"10CAB$0@A1I(

(

Recommendations

)I J0A0%B5(c"2"'B5(5"A20AC(1$BA2B'21(B'"('"a40'"2(BD'@11(B55(1$B$"1(0A(@'2"'($@(B/@02($K"(#'@&5"%1(B'010AC(P'@%(5@&&601$(#'"114'0AC(1$B$"(5BY%BE"'1($@(KB/"(1$B$"(5BY1('"5BN"2I(


39/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( :7

*I RK"'"(01($K"(A""2(P@'(D@%#451@'6('BA2@%(1B%#50AC(@P(%@'$CBC"(5"A20AC(#'BD$0D"1(BA2(%@'$CBC"(2"50Aa4"AD6('B$"1+("1#"D0B556(0A(%B_@'(1$B$"1I(RK"('"1#@A10&050$6(P@'(14DK(24$0"1(

%41$(PB55($@(BA(0A2"#"A2"A$(&@26I(

:I ?'0C0AB$@'1(1K@452(&"('"a40'"2($@(K@52(B('BA2@%56(1"5"D$"2(A4%&"'(@P(%@'$CBC"1(P'@%("BDK(%@'$CBC"(D5B11I(;''BAC"'1(1K@452(&"('"a40'"2($@(K@52(B(1#"D0P0"2(#"'D"A$BC"($K"(

"a40$6($'BADK"(@P(BA6(1$'4D$4'"($KB$($K"6(1"55I(

^I GA(DB1"1(YK"'"(B(D@4A$"'#B'$6(#@1$1(D@55B$"'B5+('"C45B$@'1(A""2($@(D@A102"'($K"("PP"D$1(@P(kY'@AC]YB6l(D@4A$"'#B'$6(D'"20$("N#@14'"(0A(2"$"'%0A0AC(DB#0$B5('"a40'"%"A$1I((RK"6(

B51@(A""2($@('"D@CA0F"($K"("PP"D$1(@P(#'@]D6D50DB50$6(0A(1$'"11($"1$0AC(BA2(1D"AB'0@(BAB56101I(

VI cB0'(/B54"(BDD@4A$0AC(KB1(D@%"(0A(P@'(D'0$0D01%(24"($@(0$1(#'@]D6D50DB5(AB$4'"I((;(#@110&5"(1@54$0@A(01($@(B55@Y(0A/"1$%"A$(&BAE1($@(#5BD"(BA(B11"$("0$K"'(0A($K"($'B20AC(&@@E(@'($K"(

&BAE(&@@EI(RK01(2"D010@A(01(%B2"(B$($K"($0%"($K"(&BAE(&461($K"(B11"$I(RK"'"(01($K"(A""2(

P@'(1@%"('45"1($@(B/@02(DK"''6(#0DE0AC(&6(&BAE1(o($KB$(01(&BAE1(DBAA@$(E""#(@A(1Y0$DK0AC(

BA(B11"$(&BDE(BA2(P@'$K(B1(%B'E"$(D@A20$0@A1(DKBAC"I(

\I c@'(P0ABAD0B5(0A1$0$4$0@A1($KB$(B'"(@P(B(10F"(@'(0%#@'$BAD"(14DK($KB$($K"0'(PB054'"($K'"B$"A1($K"(1$B&050$6(@P($K"(P0ABAD0B5(161$"%+($K"'"(01($K"(A""2(P@'(D@A101$"A$('"C45B$0@A(BD'@11(14DK(

0A1$0$4$0@A1I87(

-I RK"(P'BC%"A$"2('"C45B$@'(161$"%(&@$K(B$($K"(c"2"'B5(5"/"5(BA2(B$($K"(1$B$"(5"/"5(A""21($@(&"(0%#'@/"2I7,(

8I ."C45B$@'1(A""2($@(%@A0$@'($K"('B$0AC(BC"AD0"1(Y0$K('"1#"D$($@(2B$B(a4B50$6+(%"$K@2@5@C0"1+(BA2($K"("PP0DBD6(@P($K"0'(#'"20D$0@AI((RK"(0AK"'"A$(D@AP50D$1(@P(0A$"'"1$(

&"$Y""A($K"('B$0AC(BC"AD0"1(BA2($K"0'(D50"A$1(A""21($@(&"(B22'"11"2I7)(RK"(B&050$6($@(

#"'P@'%(0A2"#"A2"A$(/B502B$0@A(@P('B$0AC1(Y@452(C@(B(5@AC(YB6($@('"24D"($K"("PP"D$1(@P(

#@110&5"(D@AP50D$1(@P(0A$"'"1$+(YK0DK(B'"(0%#@110&5"($@("50%0AB$"I((

7I ="A$'B50F"2(D5"B'0AC(K@41"1(T==O1U(1K@452(&"(41"2($@('"24D"(BA2(5@DB50F"(D@4A$"'#B'$6('01EI((

4.6 Risk Management Issues

RK"(!"A0@'(!4#"'/01@'1(9'@4#(0114"2(B('"#@'$(0A(JB'DK(*,,8($KB$(02"A$0P0"1('01E(%BABC"%"A$(#'BD$0D"1($KB$(20PP"'"A$0B$"(P0ABAD0B5(0A1$0$4$0@A1($KB$(KB/"(&""A(B&5"($@(Y"B$K"'(

'"5B$0/"56(Y"55($K"(P0ABAD0B5(%B'E"$($4'%@05+(P'@%($K@1"($KB$(202(A@$(#"'P@'%(Y"55(BA2(KB/"(&""A(

"N#@1"2($@(5B'C"(D'"20$(Y'0$"]@PP1I((c0'%1($KB$(#"'P@'%"2('"5B$0/"56(Y"55L(

](B2@#$"2(B(D@%#'"K"A10/"(/0"Y(@P($K"0'("N#@14'"1L($K"6(1KB'"2(a4BA$0$B$0/"(BA2(

a4B50$B$0/"(0AP@'%B$0@A(%@'"("PP"D$0/"56(BD'@11($K"(@'CBA0FB$0@A(1@($KB$($K"6(Y"'"(B&5"($@(02"A$0P6(


40/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( ^,

/"'6("B'56($K"(1@4'D"1(@P(10CA0P0DBA$('01E(BA2(KB2(%@'"($0%"($@("/B54B$"($K"(B##'@#'0B$"(BD$0@A1($@(

&"($BE"AX($K"1"(P0'%1(KB/"('01E(%BABC"%"A$(D@%%0$$""1($KB$(%""$(@A(B(Y""E56(&B101($@(201D411(B55(

10CA0P0DBA$('01E("N#@14'"(BD'@11($K"(P0'%+(BA2(0AD542"(1"A0@'(%BABC"%"A$(T=`?+(=c?+(=.?+(

=??+IIU(BA2($K"(K"B21(@P(&410A"11(50A"1(B1(Y"55(B1(5"CB5(BA2(D@%#50BAD"(@PP0D"'1+(B55(B1("a4B5(

#B'$A"'1X(

](KB2(0A(#5BD"('0C@'@41(0A$"'AB5(#'@D"11"1($@(/B54"(D@%#5"N(BA2(#@$"A$0B556(0550a402(

1"D4'0$0"1L($K"6(KB2(0A2"#"A2"A$(0A]K@41"("N#"'$01"($@(B11"11($K"(D'"20$(a4B50$6(@P(1$'4D$4'"2(D'"20$(

B11"$1(BA2(Y"'"(A@$('"560AC(@A56(@A($K"(B11"11%"A$(@P(D'"20$('B$0AC(BC"AD0"1X((

]("AP@'D"2(BD$0/"(D@A$'@51(@/"'($K"(D@A1@502B$"2(@'CBA0FB$0@Am1(&B5BAD"(1K""$+(50a4020$6(

BA2(DB#0$B5(#@10$0@A1L($K"6(B50CA"2($K"($'"B14'6(P4AD$0@A1(%@'"(D5@1"56(Y0$K('01E(%BABC"%"A$(

#'@D"11"1+(0AD@'#@'B$0AC(0AP@'%B$0@A(P'@%(B55(&410A"11"1(0A(C5@&B5(50a4020$6(#5BAA0AC+(0AD5420AC(

BD$4B5(BA2(D@A$0AC"A$(50a4020$6('01EX($K"1"(P0'%1(KB2(0A(#5BD"(0A$"'AB5(#'0D0AC(%"DKBA01%1($KB$(

#'@/02"(0AD"A$0/"1(P@'($K"(&410A"11(4A0$1($@(&"$$"'(D@A$'@5(&B5BAD"(1K""$(C'@Y$K(BA2("A14'"($KB$(

D@A$0AC"A$(50a4020$6('01E(2@"1(A@$(@4$Y"0CK("N#"D$"2('"$4'A1X((

]('"50"2(@A(B(Y02"('BAC"(@P('01E(%"B14'"1L($K"6(KB2(B2B#$0/"('01E(%"B14'"%"A$(#'@D"11"1(

BA2(161$"%1($KB$(D@452('B#0256(B5$"'(4A2"'560AC(B114%#$0@A1(0A('01E(%"B14'"1($@('"P5"D$(D4''"A$(

D0'D4%1$BAD"1X(0A(#B'$0D45B'+($K"6(D@%#5"%"A$"2(HB.(%"B14'"1(Y0$K(P@'YB'2]5@@E0AC(1$'"11(

$"1$0ACX7*(1$'"11($"1$1(1#"D0B556(2"10CA"2($@(B55@Y(P0'%1($@("1$0%B$"($K"("D@A@%0D(&"A"P0$1(@P(

20/"'10P0DB$0@A(BA2($K"(0%#BD$(@P(D@''"5B$0@A('01E(0A(1$'"11"2(%B'E"$1I(`NK0&0$(*(201D411"1(kD50PPl(

"PP"D$1(@'(1$'@AC(A@A]50A"B'0$0"1($KB$(DKB'BD$"'0F"1($K"('01E(@P(14'0%"(=>?($'BADK"1+(BA2(50%0$(

$K"(41"P45A"11(@P(HB.(%"B14'"1(4A2"'(1@%"(D0'D4%1$BAD"1I(

RK"('"#@'$(B51@("%#KB10F"1($K"('@5"(@P(1"A0@'(%BABC"%"A$($@(B'$0D45B$"($K"(1$'B$"C6(@P($K"(

P0'%($KB$(Y055(0AD'"B1"(0$1(P'BADK01"(/B54"I(G%&"22"2(Y0$K0A($K01('"1#@A10&050$6(01($K"($B1E(@P(

P0A20AC($K"('0CK$(&B5BAD"(&"$Y""A($K"(2"10'"($@(2"/"5@#(A"Y(&410A"11"1(BA2($K"('01E(B##"$0$"(@P($K"(

P0'%I(GA(#B'$0D45B'+(1"A0@'(%BABC"%"A$(#5B61(B(D'0$0DB5('@5"(0A(02"A$0P60AC(BA2(4A2"'1$BA20AC(

%B$"'0B5('01E1(BA2(BD$0AC(@A($KB$(4A2"'1$BA20AC($@(%0$0CB$"("ND"110/"('01E1I(GA$"'AB5(

D@%%4A0DB$0@A(BD'@11($K"(P0'%(01(B51@(D'0$0DB5($@(#"'P@'%BAD"(0A(1$'"11"2(%B'E"$(D@A20$0@A1I(RK"(

"N01$"AD"(@P(@'CBA0FB$0@AB5(105@1(0A($K"(1$'4D$4'"1(@P(1@%"(P0'%1(B##"B'"2($@(&"(2"$'0%"A$B5($@($K"(

P0'%1m(#"'P@'%BAD"(24'0AC($K"($4'%@05I(c0'%1($KB$(B/@02"2(10CA0P0DBA$(5@11"1(D0$"2(B(2"C'""(@P(

0A$"C'B$0@A(B%@AC($K"(50a4020$6+(D'"20$+(%B'E"$(BA2(P0ABAD"(D@A$'@5(1$'4D$4'"1I(c0'%]Y02"('01E(

%BABC"%"A$(KB1(&"D@%"(B(A"D"110$6($@(E""#(#BD"(Y0$K($K"(C'@Y$K(@P('01E($BE0ACI(


41/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( ^)

c0AB556+(D@%#"A1B$0@A(KB1(&""A(D0$"2(B1(B(%B_@'(0114"(0A($K"(D4''"A$(D'"20$(D'0101I(GA(

#B'$0D45B'+($K"(0AD"A$0/"(1$'4D$4'"($0"2(5@BA(@'0C0AB$@'('"/"A4"1($@(5@BA(/@54%"+('B$K"'($KBA($@($K"(

a4B50$6(@P($K"(5@BA1($@(&"(1"D4'0$0F"2I(RK"'"(01(B(A""2($@(&"$$"'(B50CA(D@%#"A1B$0@A(BA2(@$K"'(

0AD"A$0/"1(Y0$K($K"(0A$"'"1$1(@P($K"(0A/"1$@'1(BA2(@P($K"(1KB'"K@52"'1(@P($K"(P0'%+(BA2($@(P0A2($K"(

B##'@#'0B$"(&B5BAD"(&"$Y""A(1K@'$]'4A(BA2(5@AC]'4A(#"'P@'%BAD"+(BA2(&"$Y""A(0A20/024B5(

&410A"11(4A0$(C@B51(BA2($K"(P0'%]Y02"(@&_"D$0/"1I(RK"(@'0C0AB$"]$@]201$'0&4$"(&410A"11(%@2"5(KB1(

D'"B$"2(0AD"A$0/"1(P@'(&@$K(P0'%1(BA2(0A20/024B51($KB$(KB/"(D@AP50D$"2(Y0$K(1@4A2(4A2"'Y'0$0AC(

#'BD$0D"1+('01E(%BABC"%"A$(&"1$(#'BD$0D"1(BA2($K"(0A$"'"1$(@P(0A/"1$@'1(BA2(1KB'"K@52"'1I((

Recommendations

)I c0'%1(1K@452(B2@#$(B(D@%#'"K"A10/"(P0'%]Y02"('01E(%BABC"%"A$(BA2(1KB'"(a4BA$0$B$0/"(BA2(a4B50$B$0/"(0AP@'%B$0@A(0A('01E(%BABC"%"A$(D@%%0$$""1($KB$(%""$(P'"a4"A$56(BA2(

0AD542"(1"A0@'(%BABC"%"A$(B1(Y"55(B1(K"B21(@P(&410A"11(50A"1+(5"CB5(BA2(D@%#50BAD"(

@PP0D"'1+(B55(B1("a4B5(#B'$A"'1I

*I .0C@'@41(0A$"'AB5(#'@D"11"1(1K@452(&"(#4$(0A(#5BD"($@(/B54"(D@%#5"N(BA2(0550a402(1"D4'0$0"1(BA2(0A$"'AB5(D'"20$(a4B50$6(B11"11%"A$(1K@452(D@%#5"%"A$("N$"'AB5('B$0AC1I(

:I RK"($'"B14'6(P4AD$0@A1(1K@452(&"(D5@1"56(B50CA"2(Y0$K('01E(%BABC"%"A$($@(#5BA(BA2(D@A$'@5(&B5BAD"(1K""$+(50a4020$6(BA2(DB#0$B5(#@10$0@A1I(

^I R'B20$0@AB5(HB54"]B$].01E(%"B14'"1(1K@452(&"(D@%#5"%"A$"2(&6(P@'YB'2]5@@E0AC(1$'"11($"1$0AC($@(DB#$4'"($K"(0%#BD$(@P(1"/"'"(%B'E"$(1K@DE1I(

VI RK"(0AD"A$0/"(BA2(D@%#"A1B$0@A(161$"%(1K@452(&"('"/0"Y"2($@(&"$$"'(B50CA($K"(0A$"'"1$1(@P(B55($K"(#B'$0D0#BA$1(0A($K"(1"D4'0$0FB$0@A(DKB0A(Y0$K($K"(0A$"'"1$1(@P($K"(0A/"1$@'1(BA2(

1KB'"K@52"'1(@P($K"(P0'%I(RK"(0AD"A$0/"(D@%#"A1B$0@A(1DK"%"(1K@452(&"(D5@1"56('"5B$"2($@(

5@AC]$"'%+(P0'%]Y02"(#'@P0$B&050$6I(

5 Summary(

( !"D4'0$0FB$0@A(B55@Y1(&BAE1($@(%@/"(B11"$1(@PP($K"0'(&B5BAD"(1K""$1+(P'""0AC(4#(DB#0$B5(BA2(

1#'"B20AC($K"('01E(B%@AC(%BA6(20PP"'"A$(#5B6"'1I((RK"1"(B'"('"B5(&"A"P0$1I((c"2"'B5(."1"'/"(

=KB0'%BA(


42/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( ^*

%BABC"%"A$(@'(50a4020$6(#5BA1(0A(#5BD"I(=KB0'%BA(


43/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( ^:

Appendix A

Biggest losses/write-downs since the beginning of 2007, in billions of US$ as of April 2008

(Source: Bloomberg)

(

=0$0C'@4#( ( ( ( ( b^,I7(

Z

J"''055(h6ADK( ( ( ( ( b:)I-(

J0F4K@(c0ABAD0B5(9'@4#( ( ( bVIV(

=BAB20BA(G%#"'0B5(


44/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( ^^

Exhibit 1

="A$'B5(


45/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( ^V

Exhibit 2: Cliff effects or non-linearities in the risk of subprime CDO tranches

?1(B'"(0A(PBD$(=>?(1a4B'"2(B1($K"(4A2"'560AC(

#@@5(@P(B11"$1(@P($K"(=>?(01(D@%#@1"2(@P(14'0%"(J

5"/"5(@P(14&@'20AB$0@A(@P($K"(5@Y"'($'BADK"1(0AD'"B1"+(0A('"5B$0/"($"'%1+(BA2(DBA('"BDK(),(#"'D"A$(

@/"'($0%"I(;114%0AC(B('"D@/"'6(@P(V,(#"'D"A$(@A($K"(P@'"D5@1"2(K@%"1+(%"BA1($KB$(B(2"PB45$('B$"(

@P(*,(#"'D"A$(@A(14'0%"(%@'$CBC"1+(YK0DK( 01( '"B501$0D( 0A( $K"(D4''"A$("A/0'@A%"A$+(Y055(%@1$(

50E"56( K0$( %@1$( @P( $K"( $'0#5"]


46/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( ^\

BD'@11(B55($K"($'0#5"]

$K"6(B55(Y055(&"(Y0#"2(@4$(B$($K"(1B%"($0%"+(Y0#0AC(@4$($K"(14#"']1"A0@'($'BADK"(@P($K"(14'0%"(

=>?I(GA(@$K"'(Y@'2+(Y"(B'"(0A(B(&0AB'6(10$4B$0@A(YK"'"("0$K"'($K"(D4%45B$0/"(2"PB45$('B$"(@P($K"(

14'0%"( %@'$CBC"1( '"%B0A1( &"5@Y( $K"( $K'"1K@52( $KB$( E""#1( $K"( 4A2"'560AC( J

4A$@4DK"2( BA2( $K"( 14#"']1"A0@'( $'BADK"1( @P( 14'0%"( =>?1( Y@Am$( 0AD4'( BA6( 5@11+( @'( $K"(

D4%45B$0/"(2"PB45$('B$"(&'"BDK"1($K01($K'"1K@52(BA2($K"(14#"']1"A0@'($'BADK"1(@P( 14'0%"(=>?1(

D@452(B55(&"(Y0#"2(@4$I(((


47/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( ^-

References

;DKB'6B+(HI+( !I("D"%&"'(*,,-I(

I(9B5B0(BA2(.I(JB'E+(RK"(`11"A$0B51(@P(.01E(JBABC"%"A$+(JD9'BY]O055+(*,,\(

>B/0"1+(eI(kJ@'$CBC"(c'B42(G1(e'0%"l+(dB55(!$'""$(3@4'AB5+(;4C41$()8+(*,,-I(

>B/0"1+(eI(3I(3I(O4CK"1(BA2(9I(R"$$+(k!@(dKB$(G1(G$(d@'$Kl+(c0ABAD0B5(R0%"1(Th@A2@AU+(!"#$"%&"'(

):+(*,,-I(


48/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( ^8

>@%1+(JI+( cI(c4'5@AC(BA2( 3I(['B0A"'+(kO@41"( e'0D"1( BA2( !4'0%"(J@'$CBC"(>"50Aa4"AD0"1l+(

c"2"'B5(."1"'/"("/"A$"'+(>I(.I+(kRK"(*,,-(='"20$(='0101L(;(=B1"(!$426l+([B%BE4'B(=@'#@'B$0@A+(!"#$"%&"'+(

*,,-I(

>4PP0"+( >I( kGAA@/B$0@A1( 0A( ='"20$( .01E( R'BA1P"'L( G%#50DB$0@A1( P@'( c0ABAD0B5( !$B&050$6l+( de+(

!$BAP@'2(ZA0/"'10$6+(JB6(*^+(*,,-I(

>4PP0"+( >I+( ;I( `DEA"'+( 9I( O@'"5( BA2( hI( !B0$B+( kc'B05$6( =@''"5B$"2( >"PB45$l+( de+( !$BAP@'2(

ZA0/"'10$6+(c"&'4B'6()\+(*,,\I(

c"A2"'+( GI+(MI( RB'B1K"/( BA2( OI( rK4+( k='"20$( c4A2B%"A$B51+( 'B$0AC1( BA2( /B54"]B$].01EL(=>?1(

/"'141(=@'#@'B$"(`N#@14'"1l+(?'0C0AB$@'1j!"'/0D"1l+(JB'DK()^+(*,,-I(

c0$DK( .B$0AC1+( kc0$DK( .B$0AC1( )77)]*,,-( 95@&B5( !$'4D$4'"2( c0ABAD"( R'BA10$0@A( BA2( >"PB45$(

!$426l+(;#'05()8+(*,,8I(

9@521$"0A+(JI(BA2(>I(O"A'6+(k"D"%&"'()7+(*,,-I(

[BA"P+( JI( R"1$0%@A6( &"P@'"( $K"( =@%%0$$""( @A("&$(e'@C'B%1(0A($K"(!GH(!"D$@'l+(e'"#B'"2(."%B'E1+(!"#$"%&"'(V+(*,,-I(


49/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( ^7

J@'C"A1@A+(9I(kGA102"($K"(=@4A$'6Y02"(c0ABAD0B5(h"A20AC(!#'""l+(M"Y(q@'E(R0%"1+(;4C41$(*\+(

*,,-I(

J@'$CBC"(

?m"PB45$(Z#2B$"1(B1(@P(34A"(*,+(

*,,8l+(34A"(*\+(*,,8I(

R055%BA+(HI(;I(R"1$0%@A6(&"P@'"($K"(=@%%0$$""(@A(


50/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( V,

vd"(C'B$"P4556(BDEA@Y5"2C"(D@%%"A$1(P'@%(!$"/"(;'&@CB1$+(d0550B%(>"55B5+(>B''"55(

>4PP0"+(eB45(`%&'"DK$1+(R@%(9"@'C"+(.B_AB(90&1@A+(>BA(3@A"1+(;'$K4'(JBCKBE0BA(BA2(h""(

dBE"%BAI(d"(Y@452(50E"(B51@($@($KBAE(!$"#K"A(c0C5"Y1E0+($K"("20$@'+(P@'(D@A1$'4D$0/"(BA2(

K"5#P45(D@%%"A$1I(

(

((((((((((((((((((((((((((((((((((((((((((((((((()(RK"($"'%(k14'0%"l('"P"'1($@(%@'$CBC""1(YK@(B'"(4AB&5"($@(a4B50P6(P@'(#'0%"(%@'$CBC"('B$"1I(."B1@A1(P@'($K01(0AD542"(#@@'(D'"20$(K01$@'0"1(T#B6%"A$(2"50Aa4"AD0"1+(DKB'C"(@PP1+(&BAE'4#$D0"1+(5@Y(D'"20$(1D@'"1+(5B'C"("N01$0AC(50B&050$0"1+(K0CK(5@BA($@(/B54"('B$0@1UI(*(GA(;#'05(*,,8+($K"(GA$"'AB$0@AB5(J@A"$B'6(c4A2(TGJcU(1B02($KB$($@$B5(P0ABAD0B5(5@11"1(1$"%%0AC(P'@%($K"(K@410AC($4'%@05(BA2($K"(C5@&B5(D'"20$(D'4ADK+(0AD5420AC($K"(1"D4'0$0"1($0"2($@(D@%%"'D0B5('"B5("1$B$"(BA2(5@BA1($@(D@A14%"'1(BA2(D@'#@'B$"1+(%B6('"BDK(Z!b7^V(&0550@A(@/"'($K"(A"N$($Y@(6"B'1+(Y0$K(Z!bV\V(&0550@A(20'"D$56('"5B$"2($@($K"(14'0%"(D'0101I(;A2(5@11"1(B$(P0ABAD0B5(0A1$0$4$0@A1(B'"(50E"56($@(&"(1B225"2(Y0$K(KB5P($K"(#@$"A$0B5(5@11"1+(@'(B&@4$(Z!b^^,($@(Z!bV),(&0550@AI(:(RK"(Z!b:,,(&0550@A(0A(5@11"1('"5B$"2($@($K"(14'0%"(D'0101(D@%#B'"1($@(B&@4$(Z!b)-,(&0550@A(0A(5@11"1(P@'($K"(1B/0AC1(BA2(5@BA(D'0101(0A($K"()78,1(BA2("B'56()77,1I((

^(;##"A20N()( 1K@Y1( $K"( D'"20$( 5@11"1( BA2( 14'0%"( '"5B$"2(Y'0$"]2@YA1(10AD"( $K"( &"C0AA0AC( @P(*,,-(B$(%B_@'(&BAE1(Y@'52Y02"+(&B1"2(@A( 2B$B( D@%#05"2(&6(


51/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( V)

((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((())(=PI(0R'BNN(`4'@#("(D'@11@/"'(0A2"NI(G$(D5@1"2(B$(V),((@A(c"&'4B'6(\+(YK0DK(%"BA1($KB$($K"(BAA4B5(D@1$(@P(0A14'0AC(),(%0550@A("4'@1(Y@'$K(@P(K0CK]60"52(2"&$(BCB0A1$(2"PB45$(@/"'(V(6"B'1(01(V),+,,,("4'@1I(GA($K"(ZI!I+($K"(O0H@5(0A2"N(@P($K"(:,('01E0"'(0A/"1$%"A$(C'B2"(D'"20$1(@P($K"()*V(AB%"1(D@%#@10AC($K"(=>t(0A2"N('"BDK"2(B5%@1$(0$1(#"BE(@A(c"&'4B'6(\+(B$(*-)(I(

)*( ;DD@'20AC( $@( B( '"D"A$( '"#@'$( &6(;5$%BA( BA2( [B'50A( T*,,8U( 2"PB45$( 'B$"1(Y"'"( A"B']'"D@'2( 5@Y( BA2(

'"D@/"'6('B$"1(Y"'"(A"B'('"D@'2(K0CK(0A(*,,-(P@'(K0CK]60"52(&@A21I(>"PB45$('B$"1(P"55($@(_41$(V)(+($K"(5@Y"1$(10AD"()78)I(;DD@'20AC($@(!Qe($K"(2"PB45$('B$"(@A(5"/"'BC"2(5@BA1(2"D'"B1"2(BCB0A(0A(*,,-($@(_41$(*\(+(2@YA(P'@%()I)i(0A(*,,\(BA2(:i(0A(*,,VI(>"PB45$(5@11"1(@A(K0CK(60"52(&@A21(Y"'"(_41$(*,((0A(*,,-(&B1"2(@A(BA(B/"'BC"('"D@/"'6('B$"(@P(\-iI((?A"(%"B14'"(@P($K"(#@$"A$0B5(0AD'"B1"(0A(2"PB45$1(C@0AC(P@'YB'2(01($K"(201$'"11('B$0@+(0I"I+(&@A21(60"520AC(%@'"($KBA(),i(B&@/"(R'"B14'0"1I(RK01('B$0@(0AD'"B1"2(2'B%B$0DB556($@(),I^i(B1(@P(6"B']"A2(*,,-(P'@%('"D@'2(5@Y(5"/"51(_41$(10N(%@A$K1("B'50"'+(BA2(P'@%()I-i(B$($K"("A2(@P(*,,\I((;5$%BA(P@'"DB1$(B(2"PB45$('B$"(P@'(K0CK(60"52(&@A21(@P(^I\i(0A(*,,8(BA2(Vi(0A(*,,7+(B(10CA0P0DBA$(0AD'"B1"(P'@%($K"(D4''"A$(2"PB45$('B$"(@P(V)(I(

):(G$"%1(KB/"(&""A(2'BYA(P'@%(%BA6(20PP"'"A$(1@4'D"1L(4PP0"(T*,,-U(P@'(B(201D4110@A(B&@4$(D'"20$('01E($'BA1P"'(0AA@/B$0@A1I()7(;DD@'20AC($@(!1(T='"20$(>"PB45$(!YB#1U(YB1(Z!bV8($'0550@A("A2(@P(>"D"%&"'(*,,-(YK05"(0$(YB1(@A56(Z!b)^($'0550@A(B$($K"("A2(@P(*,,VI(O@Y"/"'+(BDD@'20AC($@(G!>;+($K"(A"$("N#@14'"($@($K"(&BAE0AC(161$"%(01(k@A56l(Z!b)($'0550@A(BP$"'(A"$$0ACI(

*,(>@%1+(c4'5@AC(BA2(['B0A"'(T*,,-U( P0A2( B(A"CB$0/"(D@''"5B$0@A(&"$Y""A(K@41"( #'0D"1(B##'"D0B$0@A(BA2(14'0%"(2"50Aa4"AD6('B$"1I((RK"6(B51@(1K@Y($KB$($K"('B$"(@P(DKBAC"(0A($K"(#'0D"(B##'"D0B$0@A(BPP"D$1($K"(2"50Aa4"AD6('B$"I(((

*)(RK"(J@'$CBC"(


52/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( V*

(((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((`/02"AD"(@P(5@@1"A0AC(4A2"'Y'0$0AC(1$BA2B'21(YB1(P0'1$(A@$"2(0A(*,,V(0A( $K"(?PP0D"(@P($K"(=@%#$'@55"'(@P($K"(=4''"AD6m1(BAA4B5(14'/"6(@P(4A2"'Y'0$0AC(#'BD$0D"1(B$(AB$0@AB5(DKB'$"'"2(&BAE1I(

*V(d"(Y055(14&1"a4"A$56(201D411(YK6($K"(=>?(&@A21(Y"'"(%01]'B$"2I(?1(BA2($'0#5"];('B$"2(;


53/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( V:

(((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((*,,\($KB$(."1JB"(%@'$CBC"(=@'#I(YK0DK(1@52(0$(Z!b:IV(&0550@A(0A(14'0%"(%@'$CBC"1+(&46(&BDE(Z!b:,8(%0550@A( @P( 5@BA1( YK"'"( $K"( &@''@Y"'1( KB2( 2"PB45$"2I( ."1JB"( 1B02( $KB$( $K@1"( 2"%BA21( kD'0##5"2l( 0$1(@#"'B$0@A1+( 0A( 0$1(P050AC( P@'(&BAE'4#$D6( #'@$"D$0@A( 0A(c"&'4B'6(*,,-I(;DD'"20$"2(O@%"(h"A2"'1(O@520AC('"#@'$"2(B(5@11(@P(Z!b:-I8(%0550@A(24"($@('"#4'DKB1"(@P(&B2(5@BA1(Tc"&'4B'6+(*,,-UI(

^,(GA(34A"(*,,^+(M"Y(3"'1"6m1(;11"%&56(BA2(!"AB$"(#B11"2(&0551($KB$('@55"2(&BDE(#B'$1(@P($K"("B'50"'(5BY+(

0AD5420AC($K"(k$BAC0&5"]A"$]&"A"P0$('45"l($KB$('"a40'"2(5"A2"'1($@(#'@/"($KB$(B('"P0ABAD0AC(@P(BA6(K@%"(5@BA(5"11($KBA(P0/"(6"B'1(@52(Y@452(#'@/02"(B(k$BAC0&5"]A"$]&"A"P0$l($@($K"(&@''@Y"'I(RK@41BA2(@P(M"Y(3"'1"6(K@%"@YA"'1( 14&1"a4"A$56('"P0ABAD"2( "N01$0AC(%@'$CBC"1(@'( $@@E(A"Y( 5@BA1(Y0$K(;%"'0a4"1$(&"P@'"( $K"(14'0%"(%B'E"$($BAE"2I(JBA6(@P($K"1"(5@BA1(B'"(A@Y(0A(P@'"D5@14'"I((

^)(RK01(1"D$0@A(2'BY1(@A(%B$"'0B5(C0/"A(0A(e@50F4(T*,,\UI(

^*(RK"(2"P"B1BAD"(%@2"(01($K"(@'2"'56(Y0A2]2@YA(&6($K"(%BABC"'(@P($K"(#@'$P@50@I((RK"("AP@'D"%"A$(%@2"(@DD4'1(0P($K"($'41$""(4A2"'$BE"1($K"(Y0A2]2@YAI((

^:( ( =B#0$B5( A@$"1( B'"( 14&@'20AB$"2( $@( 1"A0@'( D'"20$@'1( BA2( 'BAE( #B'0( #B114(Y0$K( B55( @$K"'( DB#0$B5( A@$"1(@4$1$BA20ACI((=B#0$B5(A@$"1($6#0DB556(KB/"(B(P0N"2(%B$4'0$6(2B$"I((`BDK(6"B'($K"(%B$4'0$6(01(B4$@%B$0DB556("N$"A2"2(P@'(B( P4'$K"'(6"B'+(4A5"11($K"(0A/"1$@'(1$@#1($K"(B4$@%B$0D("N$"A10@AI((RK01(%"DKBA01%(01( $"'%"2($K"(k'@550AC(DB#0$B5( A@$"1lI( ( =B#0$B5( A@$"1( 414B556( '"D"0/"( 1@%"(%0A0%4%('B$"+( #B6B&5"( B$( #'"]1#"D0P0"2(2B$"1I((RK"(0A$"A$0@A(@P($K"(%BABC"'(01($@(D'"B$"("ND"11(1#'"B2(B&@/"($K01(%0A0%4%('B$"I((e'@P0$1(B'"(1KB'"2(&"$Y""A( $K"( %BABC"'( T#"'P@'%BAD"( P""1U( BA2( $K"( 0A/"1$@'( TEA@YA( B1( BA( B220$0@AB5( 0A$"'"1$( B%@4A$UI((h"/"'BC"(P@'(B( !GH( 01(2"P0A"2( B1($K"( 'B$0@(@P( 1"A0@'( 2"&$(T;'"12A"'(2@"1( A@$( BA$0D0#B$"( $@(%BE"( 14&1$BA$0B5( 5@11"1( B1( 0$1( B11"$1( B'"( "A$0'"56(0A/"1$%"A$( C'B2"( BA2(2@( A@$(D@A$B0A( BA6("N#@14'"( $@( 14'0%"(%@'$CBC"1(BA2( '"5B$"2( 1$'4D$4'"2( D'"20$(#'@24D$1I(^\(GA($K"("/"A$(@P(B(&@A2(2"PB45$0AC+($K"(%@A@50A"(BC'""1($@(%BE"(YK@5"(0A$"'"1$(BA2(#'0AD0#B5(#B6%"A$1(@A($K"0'('"1#"D$0/"(24"(2B$"1I(^-(RK"(@A56("ND"#$0@A(YB1(;=;(YK0DK(YB1('B$"2(10AC5"];(BA2(YK0DK(C4B'BA$""2(Z!b*\I\(&0550@A(@P(=>?1(&BDE"2(&6(14'0%"(%@'$CBC"1I((;1(5@AC(B1($K"(%@A@50A"(%B0A$B0A1(0$1(10AC5"];('B$0AC+($K"(D@4A$"'#B'$0"1(2@Am$('"a40'"($K"(%@A@50A"($@(#@1$(D@55B$"'B5("/"A(0P($K"(/B54"(@P($K"(1"D4'0$0"1(0$(0A14'"2(P"55(0A(/B54"I(

^8((;1(%@'$CBC"(2"50Aa4"AD0"1('@1"+(1@(202(#B#"'(5@11"1I((GA(M@/"%&"'+($K"(%@A@50A"(=Gc9+(YK0DK(KB2("N#@14'"(@P(B##'@N0%B$"56(Z!b\(&0550@A($@($K"(Z!(14'0%"(%B'E"$+('"D"0/"2(B(Z!b)IV(&0550@A(0A_"D$0@A(P'@%($Y@(c'"ADK(&BAE1I((;P$"'($K"(0A_"D$0@A+(c0$DK('"]BPP0'%"2(=Gc9(;;;('B$0AC1I((J


54/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( V^

(((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((^7(RK"'"(01(D@AD"'A($KB$(&BAE1(%0CK$(KB/"($@(Y'0$"(2@YA(BA(B220$0@AB5(Z!b^,($@(Z!b(-,(&0550@A(D@A1"D4$0/"($@($K"(2@YAC'B2"(@'($K"(&BAE'4#$D6(@P(%@A@50A"1I(

V,(;(#@$"A$0B5(&B05@4$(@P(c9G=+($K"($K0'2(&0CC"1$(%4A0D0#B5(&@A2(0A14'"'(0A($K"(ZI!I(Y0$K(B&@4$(Z!b:)V(&0550@A(@P(0A14'"2(&@A21(@4$1$BA20AC+(01(&"0AC(5"2(&6(=B56@A+($K"(0A/"1$%"A$(&BAE0AC(4A0$(@P(c'BAD"m1(='"20$(;C'0D@5"I(?$K"'(&BAE(0A($K"(D@A1@'$04%(0AD542"(Z

V8(e'0D"(01(2"P0A"2(B1($K"(B%@4A$($KB$(Y@452(&"('"D"0/"2($@(1"55(BA(B11"$(@'(#B02($@($'BA1P"'(B(50B&050$6I(

V7(c@'(B('"D"A$(201D4110@A(BA2('"P"'"AD"1($@("N$BA$(50$"'B$4'"+(1""(?m


55/56

='"20$(='0101( ='@4K6+(3B''@Y(BA2(R4'A&455( VV

(((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((\^([0AC(=@4A$6(@PP0D0B51(&@4CK$(Z!bV:(%0550@A(0A(JB0A1B05(D@%%"'D0B5(#B#"'+(YK"A('B$"2(;;;(&6(!QeI(G$(01(A@Y('B$"2(


56/56

(((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((((8V((RK01(YB1(B51@($K"('@@$(@P($K"(#'@&5"%1(Y0$K($K"(

sub-prime credit crisis of 07

Documents