The global economic and financial crisis has triggered a major reordering of sovereign creditworthiness, with credit ratings falling sharply for debt-burdened European countries and rising substantially for most leading emerging markets countries, according to Institutional Investor’s annual Country Credit Survey.
Western Europe is the only region to suffer an overall decline in its creditworthiness rating over the past year, not surprising given Greece’s recent debt crisis and the fallout in Ireland, Italy, Portugal and Spain. European countries post six of the ten biggest declines in credit ratings, with Greece falling a whopping 31 points, to 43.9, on a scale of zero to 100. Among other heavily indebted European Union countries, Portugal falls 17.9 points and Spain drops 14.9 points.
In contrast to the woes of the Old World, emerging-
How the Ratings Are Compiled The Country Credit ratings developed by Institutional Investor are based on information provided by senior economists and sovereign-risk analysts at leading global banks and money management and securities firms. The respondents have graded each country on a scale of zero to 100, with 100 representing the least likelihood of default. Participants’ responses were weighted according to their institutions’ global exposure. Names of respondents are kept strictly confidential.
The September 2010 Country Credit survey was conducted by II staff under the guidance of Senior Editor Jane B. Kenney.