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Political risk is a key determinant of sovereign creditworthiness, Ed Parker, Head of EMEA Sovereign Ratings and James McCormack, Global Head of Sovereign Ratings, say.
They highlight that political and governance issues were the driving or supporting factors in a cumulative 47% of sovereign downgrades, rating crises, or defaults from 1997 to present. They point to current political events that may negatively affect ratings such as:
• Activity in the Korean Peninsula
• The Gulf and wider Middle Eastern tensions
• US withdrawal from the Iran nuclear deal
• Global oil prices
From global macroeconomic trends to impacts on the credit markets to regulatory and political changes, Fixed Interests delivers your economic update in 15 minutes or less.