Euromoney (November Issue)
With returns on some Ukraine sovereign debt exceeding 16%, there are obviously concerns over a possible default. “Ukraine’s policymakers, however, are adamant that default or even restructuring is out of the question. The main reasons given are national pride and, more cogently, a desire to maintain access to international capital markets.”
Tags: Capital markets, Default, Policymakers, Pride, Restructuring, Returns, Sovereign debt, Ukraine
The Economist (October 26)
“The euro mess has morphed from an acute crisis into a chronic one.” In contrast with the progress made on sovereign debt, however, “the euro zone has made less headway than other places in reducing this private-debt burden…. If the euro zone’s recovery is to strengthen, this burden of private debt must be lightened. According to the IMF, private debt is a bigger drag on Europe’s growth than government debt.”
Tags: Burden, Crisis, Euro zone, Europe, Government, Growth, IMF, Private-debt, Progress, Recovery, Sovereign debt
Financial Times (September 25)
“Congress needs to regain its senses before disaster hits.” Without Congressional action, the government will shut down next week and in several more begin defaulting on its sovereign debt. “As the sole superpower and provider of the international reserve currency, the US owes a duty to the world, as well as to itself, to uphold one of the most basic functions of a nation state. Flirting with a government shutdown is pantomime enough. Toying with whether the US will honour its sovereign debt obligations is pure recklessness.”
Tags: Congress, Defaulting, Duty, Recklessness, Reserve currency, Shutdown, Sovereign debt, Superpower, U.S.
Euromoney (April Issue)
“Asian sovereigns are overtaking advanced western economies in their financial and economic stability.” With the input of 400 economists and specialists, Euromoney conducted its latest country risk survey. The results reveal a “profound shift in global perceptions.” Six Asian countries (Indonesia, Singapore, Hong Kong, Malaysia, Taiwan and Macau) have advanced more than 10 places in the rankings and Singapore is now considered the world’s second-safest sovereign. In contrast, the highest ranking Eurozone country is Finland in fifth place. Hong Kong was rated the tenth safest, trumping Germany which stands at thirteenth.
Financial Times (October 5)
In a better-late-than-never move, the EU is moving to ensure banks are adequately capitalized. The EU still needs to get to the heart of the matter, “given that the biggest systemic risk to the region’s banks is contagion from sovereign debt.” Eurozone policymaking continues to deny “how serious the problems are until there is no alternative…. By then the cost of action is greater than it might have been with a more timely response.”
Tags: Banks, EU, Risk, Slow response, Sovereign debt
Washington Post (September 27)
“If Europe goes bankrupt, taking the rest of the world down with it, it won’t be for a lack of ideas about how to fix the continent’s sovereign-debt mess.” Yet, Germany has applied the brake to any number of fixes. It looks like the price for this inaction will be “a brutal, global recession.” Hopefully, Europe’s leaders can still avert this by demonstrating “clearly and convincingly that they have a plan for restructuring insolvent countries (e.g., Greece) while shoring up salvageable ones (e.g., Italy and Spain).”
Institutional Investor (September 15)
“The rise in government debt and consequent decline in sovereign creditworthiness…stand out as the biggest and most pernicious legacies of the financial crisis.” Political uncertainty ranks nearly as high. “European leaders careen from one crisis summit to the next” and U.S. politicians pursued a “similarly shaky direction” over the debt ceiling. “As a result, market participants are losing confidence that politicians can strike the right balance and contain debt without killing growth.”
Tags: EU, Politicians, Sovereign debt, U.S., Uncertainty
Institutional Investor (September Issue)
Four months ago, a sovereign-debt crisis threatened the euro. Today, there is “growing confidence that the region has pulled itself back from the brink.” Institutional Investor points out “crisis eased is far from crisis resolved.” Though the outcome has been better than expected, the euro region still lacks consensus on a mechanism to avoid a future crisis. “The debt crisis has yet to spark the life-altering transformation that the euro area needs.”
Tags: Crisis, euro, Sovereign debt
The Telegraph (July 12)
Dagong Global Credit Rating Co tossed its hat into the ratings ring, offering very different ratings than Fitch, S&P or Moody’s. Dagong is painting “a revolutionary picture of creditworthiness around the world,” exclaims the Telegraph. The Chinese rater puts Norway, Denmark, Switzerland, Australia, New Zealand and Singapore at AAA; China, Germany, the Netherlands and Canada at AA+; the U.S. at AA; Britain and France at AA-; and Belgium, Spain and Italy at A-. Meanwhile, another silent revolution has taken place. Emerging countries now hold $6.3 trillion or 75% of the world’s reserves.
Tags: Creditworthiness, Dagong, NRSROs, Sovereign debt
