scholarly journals Country risk at investing in capital markets – the case of Italy

2019 ◽  
Vol 17 (2) ◽  
pp. 440-448 ◽  
Author(s):  
Božena Chovancová ◽  
Peter Árendáš ◽  
Patrik Slobodník ◽  
Iveta Vozňáková
Keyword(s):  
Economic Development ◽  
Credit Risk ◽  
Capital Markets ◽  
Credit Rating ◽  
Risk Measurement ◽  
Country Risk ◽  
Government Bonds ◽  
Risk Quantification ◽  
The Government

Given the current turbulences on the European capital markets, as well as the expectations of a new recession, it is possible to expect that the risk of individual countries and their capital markets will increase significantly. This is particularly the case of those countries, which have long-term problems with economic instability and imbalances. The basis for country risk quantification is the country credit rating and credit risk of the government bonds. The market-based methods react often differently, as their reactions to the actual market developments are more flexible. The purpose of this paper is to compare various methods of country risk measurement. The study is focused on the country risk of Italy, a country that experienced a turbulent economic development over the last two decades. The results show that the CPFER method and sovereign ratings show a similar level of country risk, while the market-based methods show a higher level of country risk.

scholarly journals DETERMINANTS OF GOVERNMENT SECURITIES YIELD USING VECM

2021 ◽  
Vol 22 (2) ◽  
pp. 127-146
Author(s):  
Batara Maju Simatupang
Keyword(s):  
Exchange Rate ◽  
Country Risk ◽  
Short Term ◽  
Government Bonds ◽  
Vector Error Correction ◽  
Indonesian Government ◽  
Vector Error ◽  
Study Methodology ◽  
The Government

This study aims to uncover the determinants’ effect on the return rate of government securities (GS). This study's data uses the government bonds that can be traded with the ten-year tenor, and the time-horizon of the collected data spans from 2009:M1 to 2018:M6. The study methodology utilizes the vector error correction model (VECM) model to determine the short-term backward behavior, which refers to the situation where the short-term balances are corrected for the long-term balances. Additionally, it is also to reveal the relationship between the variables within the model. Thus, this study is to see whether GS’s reciprocal level has been at the value of efficient return or not. The results show that the cointegrated determinants of the Bank Indonesia (BI) rate / seven days repo, outstanding tradable government bonds, Fitch Rating, exchange rate, sovereign country risk, and regional bond index positively affects the GS yield. In contrast, the determinants of Fitch Rating, exchange rate, sovereign country risk, and outstanding tradable government bond negatively influence GS yields. The implication of this research is that the Indonesian government securities are interdependent with the identified determinants; thus, the Indonesian government should maintain the movement of those determinants to ensure that its GS stays positive.

scholarly journals INFLUENCE OF GOVERNMENT CREDIT RISK ON PPP PROJECTS IN OPERATION STAGE

2021 ◽  
Vol 25 (3) ◽  
pp. 216-227
Author(s):  
Yining Zhou ◽  
Jicai Liu
Keyword(s):  
Credit Risk ◽  
Credit Rating ◽  
Negative Impact ◽  
Optimal Choice ◽  
Default Probability ◽  
Effort Level ◽  
Contractual Relationship ◽  
Allocation Ratio ◽  
Government Credit ◽  
The Government

In PPP projects, insufficient risk management may lead to the breakdown of partnerships and even project failures. Among them, the government credit risk is regarded as unbearable risk and a key risk affecting PPP projects because of its high frequency and impact. Therefore, based on the contractual relationship between both sides, a principal-agent model for the optimal choice of investors and the government under the government default probability is constructed. This paper explored the quantity relationship of the government credit risk and the project utility through analysing the effect of government default probability perceived by both parties on the investor’s optimal effort level and government allocation ratio. The results demonstrate that the government credit risk will decrease the effort level of investors and have a negative impact on the utility of the project. Furthermore, the government’s modification of the contract allocation ratio based on its own credit rating can offset the negative impact of its credit risk on the effectiveness of the project. But this regulatory effect is limited. The findings effectively provide some insights and theoretical basis for solving the negative effects of government credit risk.

South Africa's Mboweni will aid Ramaphosa reform push

2018 ◽  
Keyword(s):  
South African ◽  
Credit Rating ◽  
Short Term ◽  
Content Type ◽  
Rating Agencies ◽  
Reserve Bank ◽  
Freedom Fighters ◽  
Left And Right ◽  
The Government

Significance A former South African Reserve Bank (SARB) governor and minister of labour, Mboweni faces a crucial first few weeks in his new post as the government attempts to placate rating agencies and engineer an economic turnaround. Mboweni’s initial moves may be determined by Moody’s credit rating review expected today. Impacts In the short term, Mboweni’s appointment will be a boost for Ramaphosa’s bid for fiscal consolidation and growth. In the medium-to-long term, Mboweni will likely prove a more polarising figure inside the ANC than Nene. Allegations linking the Economic Freedom Fighters with a major banking scandal could give Mboweni and the ANC an early political 'win'. Mboweni's previous social media utterances could be further exploited by opponents, both left and right, in the months ahead.

Russian Labour Market: Trends and Transformations

2020 ◽  
Vol 26 (10) ◽  
pp. 120-126
Author(s):  
A. Tomskikh ◽  
Keyword(s):  
Economic Development ◽  
Labour Market ◽  
Russian Federation ◽  
Supply And Demand ◽  
World Market ◽  
Market Development ◽  
Global Trends ◽  
The Russian Federation ◽  
The Government

he article deals with the multifactorial aspects of the labour market development as a special economic category: stages of development, impact of the economic crisis, trends during the pandemic, movement of employment and unemployment, etc. The analysis of the situation on the labour market, both in the whole world, and in the context of Russia and its subjects, is carried out. Trends in the development of the labour market are shown through the prism of global trends in economic development and the specifics of decision-making at the level of the Russian Federation since 1989, the period of transformation of its socio-economic development and entry into the world market. Much attention is paid to the situational response of the labour market to the global coronavirus pandemic in terms of analyzing the supply and demand of vacancies, salaries and their dynamics over the past year of the largest recruitment portal in the country. The risk sectors of the labour market development are shown for the territory of Russia as a whole, federal districts and subjects of the federation. The conclusion is made about sufficient decisions of the government of the Russian Federation in the pre-crisis period and forced anti-crisis actions during the pandemic in the conditions of long-term sanctions by key world actors. The measures necessary for the adoption of federal decisions to reduce the strain on the labour market in the long term, taking into account the reduction in the economy’s income, are outlined: closing more territories or sectors of the labor market to foreign labour, organizing jobs at real enterprises, optimizing the flow of domestic labour migration and new technological solutions in the economy

How National Budget can Provide Economic Growth

2015 ◽  
pp. 142-151 ◽  
Author(s):  
A. Aganbegyan
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
National Budget ◽  
Socio Economic Development ◽  
Ministry Of Finance ◽  
The Government

The article considers the role of national budget in Russian socio-economic development. The author analyzes the Russian budget of the last decade and comes to the conclusion that it is not efficient because there is no long term planning, the allocation of responsibilities between the Ministry of Economic Development and the Ministry of Finance is not optimal, and because the government is trying to stimulate economic growth without resorting to deficit budget.

Challenges of Russian economic development and government economic policy

2016 ◽  
pp. 36-44
Author(s):  
A. Ulyukaev
Keyword(s):  
Economic Growth ◽  
Economic Policy ◽  
Economic Development ◽  
Russian Economic Development ◽  
Transaction Costs ◽  
State Support ◽  
Investment Activity ◽  
Russian Economy ◽  
The Government

The article analyzes the problems faced by the Russian economy, and response by the government economic policy. The author considers measures to address four key tasks that will maximize long-term economic growth: the reduction of direct and transaction costs, creation of conditions for the transformation of savings into investments, fostering investment activity through the mechanisms of state support, as well as the removal of demand constraints.

scholarly journals Trends in the management of global economic development in the post-pandemic period

2021 ◽  
pp. 76-86
Author(s):  
Iaroslav Petrunenko ◽  
Valentyna Chychun ◽  
Nataliia Shuprudko ◽  
Yuliia Kalynichenko ◽  
Issa Ali
Keyword(s):  
Economic Development ◽  
Public Confidence ◽  
Important Place ◽  
Forecasting Method ◽  
Short Run ◽  
World Economic ◽  
The Government ◽  
The Impact ◽  
Further Development

This article is devoted to the study of trends in the management of global economic development in the post-pandemic period. The paper developed recommendations for further development of countries in the context of the recurrence of pandemics. With this in mind, the main trends in the development of countries during the pandemic were considered and the impact of quarantine on the economies of various countries was determined. To model the future actions of states, based on studies of the historical preconditions for the development of countries in the post-crisis period, the basic patterns were identified, allowing to predict different scenarios of world economic development. The article introduces a forecasting method of global economic development based on the quadrant of trust and affluence of the population, which allows predicting various options for post-pandemic development according to four possible scenarios. The first option is a rapid V-shaped growth, which is based on the fact that with a sufficient level of public confidence in the government, as soon as the quarantine restrictions expire, the economy will gain momentum. The second one is the long-term U-shaped growth, which is expected to take place in terms of insufficient public confidence in the government, with a population reluctant to invest in economic growth. The third one is the L-shaped development, which does not provide for economic recovery in the short run due to public distrust and the impossibility of business recovery. Finally, the fourth scenario is the worst one: it's the way of development, that occurs in case of impossibility of survival and complete distrust to the government; the population will be forced to organize protests and revolutions, thus making the economy operate even worse. According to the expectations of international regulators, V or U-shaped recovery of the world economy after the COVID-19 pandemic is expected nowadays. Most businessmen believe that post-pandemic development will be U-shaped. To improve the mechanisms of managing the development of world economies, the directions of development are proposed focused not on capitalist, but social goals. The state should occupy an important place in this process acting as a guarantor of efficient allocation of resources and providing social guarantees to the population during possible further cataclysms.

Community Economic Development: Some Critical Issues

1993 ◽  
Vol 21 (3) ◽  
pp. 41-64 ◽  
Author(s):  
John W. Handy
Keyword(s):  
Economic Development ◽  
African American ◽  
Community Development ◽  
Private Investment ◽  
Development Planning ◽  
Community Economic Development ◽  
Pareto Improvements ◽  
The Government ◽  
And Training

Community development is an issue of continuing interest not only because of the need for more successful economic development within our cities, but because the survival of a significant portion of African-American poor is at stake. Community development planning seeks to improve all aspects of community life, including health, education, crime prevention, employment and training, business development, family stability, and housing. Community economic development must arise from our black churches, historically black colleges and universities, African-American officials, business leaders, teachers, and health and welfare professionals. In the real world, where group welfare functions are interdependent, only two possible long-term outcomes are both just and stable: win-win or lose-lose. Consequently, there is a need for significant Pareto improvements in all social programs. There are roles for both race-specific and race-neutral policies because long-term Pareto improvements can result both from programs such as targeted minority employment and training as well as color-blind policies that encourage legislators to forgo the coffers of the gun lobby and control the sale and use of guns. The paper will focus on the historical logic of public policy as reflected in housing policy, financing mechanisms under community development corporations, and the issue of an urban underclass. By reestablishing its commitment to the inner cities, the government can redress the onerous impact of two and a half decades of social and economic neglect and private investment retrenchment.

scholarly journals Le rendement des obligations provinciales et l’incertitude politique : une analyse de séries chronologiques

2009 ◽  
Vol 56 (3) ◽  
pp. 388-403 ◽  
Author(s):  
Claude Montmarquette ◽  
Claude Dallaire
Keyword(s):  
Financial Markets ◽  
Economic Cost ◽  
Economic Costs ◽  
Present Value ◽  
Financial Cost ◽  
Government Bonds ◽  
Additional Payments ◽  
The Government ◽  
Parti Quebecois

Abstract In this text, we apply time series techniques (Box-Tiao) to isolate the influence of the Parti québécois' electoral win of November 1976 on the financial and economic costs of the Québec government borrowings. For long term bonds issue between November 1976 and February 1979, we estimated at 32.49 millions of $ at 1979 present value or 1.22% of the total amount borrowed, the supplementary financial cost. In terms of additional payments to non-Québécois holding Québec government bonds, this associated economic cost has been evaluated at 11.21 millions of $ at 1979 present value, representing .42% of total borrowings. These costs may vary with respect to inflation and exchange rates and it must be emphasized that they are based on the evolution of yield differentials between Québec and Ontario government bonds and not on their direct yields to maturity. In that respect, these supplementary costs are only relative to the situation of Ontario and it is not impossible that the Parti québécois' électoral win have displaced the lenders portfolios of Canadian provincial bonds to the benefit of the government of Ontario. Finally, approximately two years and half following the pequist victory, the financial markets have retrieved to their former structure.

scholarly journals The Country Ceiling and Sovereign Rating Relationship Exemplified by the Case of Poland

2021 ◽  
pp. 2-17
Author(s):  
Paweł Niedziółka
Keyword(s):  
Credit Rating ◽  
Country Risk ◽  
Sovereign Risk ◽  
Rating Agencies ◽  
Credit Rating Agency ◽  
Upper Limit ◽  
Original Contribution ◽  
Scope Of Application ◽  
Economic Reality

The aim of the article is to answer the question whether the ratings of entities registered in Poland are limited by the sovereign rating of the country. The author theorises that the sovereign rating of Poland does not constitute the upper limit for ratings granted by the Big Three (Fitch Ratings, Moody’s and Standard & Poor’s) to Polish financial and non‑financial entities. The databases of three leading rating agencies were queried, selecting all (52) long‑term foreign ratings assigned to entities registered in Poland. The analysis indicates that currently no confirmation can be found of the use of the country ceiling principle, according to which the rating of any entity registered in a given country cannot be higher than its sovereign rating, by rating agencies (7.7% of rated entities in Poland is given higher rating than the sovereign one). This is at the same time a higher percentage than the average for all Big Three ratings, amounting to approx. 3%. The country ceiling is an upper, potential sovereign rating bound, resulting from the T&C risk. In the case of entities registered in Poland, however, their rating is a maximum of one notch higher than the sovereign rating, which in turn is in line with the policy that Standard & Poor’s officially announced as the only agency among the Big Three (the rating of an entity registered in a given jurisdiction can be up to four notches higher than the sovereign rating). The analysis of ratings assigned to Polish entities also indicates that a rating above the sovereign rating awarded by a given credit rating agency does not translate into similar actions of other agencies. This paper analyses the relationships between the concepts of country risk, T&C risk and sovereign risk. Another original contribution is establishing how the country ceiling principle used by rating agencies works in practice and verifying the scope of application of this principle in the Polish economic reality.

Sign in / Sign up

Export Citation Format

Share Document