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Country Risk Analysis: Principles, Practices and Policies

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Sovereign Risk and Financial Crises

Abstract

This paper introduces the main issues involved in analyzing country risk. Various definitions of country risk are highlighted. Furthermore, different approaches that are being used to assess country risk are analyzed, especially balanced-score cards, ratings, secondary market prices, and option-based approaches. They are compared with respect to their theoretical foundations, their practical use in valuing investment projects, data availability, ease of interpretation. We also pay attention to the basic techniques being used to manage country risk. In this respect, we especially focus on the way in which country risk management with internationally operating banks is affected by the Basel-II capital adequacy requirements.

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Authors and Affiliations

  1. Department of Finance, University of Groningen, The Netherlands

    Bert Scholtens

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  1. Bert Scholtens
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Editor information

Editors and Affiliations

  1. WHU Koblenz, Burgplatz 2, 56179, Vallendar, Germany

    Michael Frenkel (Chair of Macroeconomics and International Economics) (Chair of Macroeconomics and International Economics)

  2. Department of Economics, Dresden University of Technology, Mommsenstraße 13, 01062, Dresden, Germany

    Alexander Karmann (Chair of Economics, esp. Monetary Economics) (Chair of Economics, esp. Monetary Economics)

  3. Department of Finance, University of Groningen, Landleven 5, 9747 AD, Groningen, The Netherlands

    Bert Scholtens

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Scholtens, B. (2004). Country Risk Analysis: Principles, Practices and Policies. In: Frenkel, M., Karmann, A., Scholtens, B. (eds) Sovereign Risk and Financial Crises. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-09950-6_1

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  • DOI: https://doi.org/10.1007/978-3-662-09950-6_1

  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-642-06080-9

  • Online ISBN: 978-3-662-09950-6

  • eBook Packages: Springer Book Archive

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