Country risk refers to the risk of investing in a country, dependent on changes in the business environment that may adversely affect operating profits or the value of assets in a specific country. For example, financial factors such as currency controls, devaluation or regulatory changes, or stability factors such as mass riots, civil war and other potential events contribute to companies' operational risks. This term is also sometimes referred to as political risk; however, country risk is a more general term that generally refers only to risks affecting all companies operating within a particular country.
Political risk analysis providers and credit rating agencies use different methodologies to assess and rate countries' comparative risk exposure. Credit rating agencies tend to use quantitative econometric models and focus on financial analysis, whereas political risk providers tend to use qualitative methods, focusing on political analysis. However, there is no consensus on methodology in assessing credit and political risks.
Read more about Country Risk: Country Risk Ratings, Partial List of Country Risk Premium, Partial List of Credit Risk Rating Agencies, Partial List of Political Risk Analysis Organizations, Downloadable Country Analysis and Reports
Famous quotes containing the words country and/or risk:
“It would be enough for me to have the system of a jury of twelve versus the system of one judge as a basis for preferring the U.S. to the Soviet Union.... I would prefer the country you can leave to the country you cannot.”
—Joseph Brodsky (b. 1940)
“Better risk loss of truth than chance of error—that is your faith-vetoer’s exact position. He is actively playing his stake as much as the believer is; he is backing the field against the religious hypothesis, just as the believer is backing the religious hypothesis against the field.”
—William James (1842–1910)