Country risk premia quarterly update

Quarter four 2014 update

In quarter four 2014, all regions have experienced an increase in their country risk levels, continuing the trend that we seen observed in quarter three as investors look to reduce their exposure to emerging markets, preferring safe haven bond markets in the UK, US and Germany. Our latest update highlights the impact of the rapidly falling price of oil on country risk dynamics - and discusses how risk levels in the Eurozone are evolving ahead of in the wake of the recent Greek elections . Why should you and your business care about country risk? Watch our overview video below to get a better understanding.

Political drama in Greece is once again attracting headlines across the globe. The snap general election triggered in December that has been scheduled for later this month could see anti-austerity/anti-eurozone parties seen Syrzia, an anti-austerity, anti-bailout party, top the polls, a major cause for concern for holders of Greek debt. Greece's CRP rose by 0.5 percentage points in quarter four 2014, reversing its previous trend of falling each quarter since its peak level in quarter one 2012. In previous episodes of instability in Greece, a contagion effect had seen yields of other peripheral eurozone countries rise significantly. The effect has been muted this time around, in fact, Ireland and Cyprus have seen their CRPs fall in quarter four 2014 and Italy and Spain are enjoying record low borrowing costs.

Country risk map

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Our country risk videos

Why should you care about country risk?

We look in more detail at the quarter one results for our country risk map, and look at examples of how this is affecting business today.

 

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Country risk in two minutes

Naz Naini gives an overview of what country risk is, why it's relevant for your business and our services in this area.

 

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How has country risk evolved?

Our interactive map, above, shows just how much country risk has evolved over the past decade. Some countries have become much riskier to operate in, whilst others have seen their risk levels fall. An analysis of country risk trends can help organisations identify these risks and opportunities early on in their planning processes.

For UK companies that have international operations or are considering opportunities abroad, managing and accounting for country risk will be a key consideration. Our country risk service can help companies to quantify and manage such risks in order to make better business decisions.


How can we help?

Our country risk service can help companies to quantify and manage such risks in order to make better business decisions.

We calculate Country Risk Premiums (CRPs) for 187 sovereign nations using an economic model that we have developed since 1998. Our model uses a range of inputs in generating CRPs, including reliable sources of credit and risk ratings and sovereign bond information.

For more information, please contact a member of the team.