Managing Country Risk in an Age of Globalization

Abstract

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The mystery of misreported trade: A novel method to identify distorted trade figures

“…Of economic performance indicators, trade balances play central roles in country risk assessments, foreign debt sustainability assessments, conduct of monetary policies, wage policies and the strength of the financial system (Bouchet et al, 2018). In countries with low misreporting ratios, sound policies can be based on reported trade balances with confidence; however, for countries with large misreporting, the signals from reported trade and current account balances may give misleading signals on the level and trajectory of net balances and, consequently, can have unwarranted consequences for policy, cross-border capital flows, access to credit and asset prices.…”

Climate Change and Fiscal Sustainability: Risks and Opportunities

“…Both the physical impacts of climate change and the disruptions resulting from the climate policies that trading partners adopt, technological change or changes to consumption patterns can affect international trade and financial flows. Historically, balance of payment problems have often been at the root of country risk and led to external debt crises (Bouchet et al , 2018). Protracted current account imbalances tend to cause liquidity problems and, if not resolved, solvency problems.…”

Integration of Financial Risks With Non Financial Risks: An Exploratory Study From Pakistani Context

“…Losses, in turn, need to be funded, and it is thepotential for loss that imposes a need for banks to hold capital (Hargarter & van Vuuren, 2017). Capital provides the balance sheetcushion that absorbs (downside) earnings volatility and prevents a firm from becoming insolvent (Berger, Herring & Szegö, 1995;Bouchet, Fishkin & Goguel, 2018).…”