TY - BOOK ID - 134027607 TI - Evaluating the Costs of Government Credit Support Programs during COVID-19: International Evidence AU - Hong, Gee Hee. AU - Lucas, Deborah. PY - 2023 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Macroeconomics KW - Economics: General KW - Industries: Financial Services KW - Money and Monetary Policy KW - Diseases: Contagious KW - Banks and Banking KW - Public Economics: General KW - Fiscal Policies and Behavior of Economic Agents: General KW - Publicly Provided Goods: General KW - National Government Expenditures and Related Policies: General KW - National Budget, Deficit, and Debt: General KW - Monetary Policy, Central Banking, and the Supply of Money and Credit: General KW - Banks KW - Depository Institutions KW - Micro Finance Institutions KW - Mortgages KW - Governmental Loans, Loan Guarantees, Credits, and Grants KW - Health Behavior KW - Interest Rates: Determination, Term Structure, and Effects KW - Economic & financial crises & disasters KW - Economics of specific sectors KW - Finance KW - Monetary economics KW - Infectious & contagious diseases KW - Credit KW - Money KW - Loans KW - Financial institutions KW - Loan guarantees KW - COVID-19 KW - Health KW - Discount rates KW - Financial services KW - Currency crises KW - Informal sector KW - Economics KW - Communicable diseases KW - Discount KW - Germany UR - https://www.unicat.be/uniCat?func=search&query=sysid:134027607 AB - Advanced economies made available more than 5 trillion USD through government-supported credit guarantee and direct loan programs to provide lifelines to firms in the face of the COVID-19 pandemic. Notwithstanding the unprecedented scale of credit made available, an in-depth analysis of the fiscal consequences is missing, and the costs of these programs are not recognized in a transparent way. In this paper, we fill in an important aspect of the fiscal picture by estimating the subsidies that were provided by the largest credit guarantee programs introduced in 2020 in seven advanced economies. We estimate the subsidies on a fair value basis that provides a consistent and comprehensive upfront measure of cost. We explain the logic behind applying a fair value framework in a government context and compare it to alternative approaches. For the programs that we examine, total credit extended totaled 1.7 trillion USD. The subsidy element (cash-equivalent subsidy) is estimated to be 67 percent of loan principal on average (37 percent, excluding the US PPP), with a wide range across programs, from 12 to 100 percent. The variation is explained by differences across programs including eligibility criteria, loan terms, compensation to lenders, and other program design choices. ER -