Friday, March 6, 2009

Country Vulnerability Rank and Debt to GDP

Niels Jensen, head of Absolute Return Partners, details in Europe on the Ropes:

To make matters worse, the problems in the East are beginning to look systemic. Credit Suisse has produced an interesting scorecard where they rank a number of countries around the world on factors usually taken into consideration when assessing the credit quality of sovereign debt. At the top of the tree (i.e. the worst credit score) you find Iceland – hardly surprising considering their current predicament. More importantly though, of the next 14 countries on the list, 8 are Eastern European – not what you want to hear if you are an already undercapitalised European bank with huge exposure to Eastern Europe.

Source: Investor Insights


  1. Something seems wrong with the ranks. Ireland is at less risk than the US?

  2. JAKE - IS IT POSSIBLE AND FEASIBLE to caclulate and include what is
    knowable. What commitments should be in the USA data -- a going forward estimate of "debt yet to be recognized to in the data", In business we calculate two years and five years forward to know where we are headed. In public policy the data most of the time is "surprise" - retrospective - look at what has happened. To see this graphically would be helpful and potentially jarring.

  3. What do you do when a country is bankrupt. The US is definitely there. Unfortunately we can't sell texas or california to China to settle our account but by definition bankrupt countries will eventually have to reduce their standard of living.