Political Risk in Sovereign Ratings

Fixed Interests

English - May 11, 2018 09:13 - 7 minutes - 6.62 MB
Business News Politics economics sovereigns Download Apple Podcasts Google Podcasts Overcast Castro Pocket Casts RSS feed

Previous Episode: China Sovereign Update

Next Episode: Global Economic Outlook: Growth Robust to Political Risks

Political risk is a key determinant of sovereign creditworthiness, Ed Parker, Head of EMEA Sovereign Ratings and James McCormack, Global Head of Sovereign Ratings, say.

They highlight that political and governance issues were the driving or supporting factors in a cumulative 47% of sovereign downgrades, rating crises, or defaults from 1997 to present. They point to current political events that may negatively affect ratings such as:

• Activity in the Korean Peninsula
• The Gulf and wider Middle Eastern tensions
• US withdrawal from the Iran nuclear deal
• Global oil prices