Country risk

From Wikipedia, the free encyclopedia

Country risk refers to the likelihood that changes in the business environment adversely affects operating profits or the value of assets in a specific country. For example, financial factors such as currency controls, devaluation or regulatory changes or stability factors such as mass riots, civil war and other potential events contributing to companies' operational risks. This term is also sometimes referred to as political risk, however country risk is a more narrow term, which generally only refers to risks affecting all companies operating within a particular country.

Political risk analysis providers and credit rating agencies use different methodologies to assess and rate countries' comparative risk exposure. Credit rating agencies tend to use quantitative econometric models and focus on financial analysis, whereas political risk providers tend to use qualitative methods, focusing on political analysis. However, there is no consensus on methodology in assessing credit and political risks.

1 Country risk ratings
2 Partial list of credit risk rating agencies
3 Partial list of political risk analysis organizations
4 References

[edit] Country risk ratings

**Country risk rankings**
Rank	Previous	Country	Overall score
1	1	Luxembourg	99.88
2	2	Norway	97.47
3	3	Switzerland	96.21
4	4	Denmark	93.39
5	5	Sweden	92.96
6	6	Ireland	92.36
7	10	Austria	92.25
8	9	Finland	91.95
9	8	Netherlands	91.95
10	7	United States	91.27

The least-risky countries for investment. Ratings are further broken down into components including political risk, economic risk. Euromoney's bi-annual country risk index "Country risk survey" monitors the political and economic stability of 185 sovereign countries. Results focus foremost on economics, specifically sovereign default risk and/or payment default risk for exporters (a.k.a. "trade credit" risk).

[edit] Partial list of credit risk rating agencies

Fitch Ratings (U.S.)

Moody's (U.S.)

Standard & Poor's (U.S)

Business Monitor International

[edit] Partial list of political risk analysis organizations

Eurasia Group

Political Risk Services Group

Economist Intelligence Unit

Business Monitor International

[edit] References

^ [1]: Bi-annual survey which monitors the political and economic stability of 185 sovereign countries, according to ratings agencies and market experts. The information is compiled from Risk analysts; poll of economic projections; on GNI; World Bank’s Global Development Finance data; Moody’s Investors Service, Standard & Poor’s and Fitch IBCA; OECD consensus groups (source: ECGD); the US Exim Bank and Atradius UK; heads of debt syndicate and loan syndications; Atradius, London Forfaiting, Mezra Forfaiting and WestLB.