InsightsWebinar: Sovereign debt in frontier countries and the role of credit ratings

Webinar: Sovereign debt in frontier countries and the role of credit ratings

Jenny Asuncion
Apr 18, 2024

Many emerging market economies are firmly in the grip of a sovereign debt crisis. The economic fallout from the pandemic and the rapid shift in the interest rate environment has exposed underlying weaknesses of many countries’ debt-bearing capacity. Once again, sovereign defaults are on the rise in low-income countries.

How have rating agencies performed their duty of objectively flagging risks in such a dynamic environment? Have their methodologies and decision exacerbated the crisis? Or, as some critics suggest, have they caused a self-fulfilling prophecy as downgrades triggered defaults in the first place? Has the fear of downgrades prevented proactive restructuring and thus intensified the economic and social fallout of financial crises? Is the analytical approach of rating agencies still adequate in the twin debt and climate crisis afflicting many poor countries? What are the lessons learned from this episode for the ratings industry?

These are only some of the questions we will delve into in our upcoming webinar with Shari Spiegel, Acting Director of the Financing for Sustainable Development Office (FSDO) within the Department of Economic and Social Affairs at the United Nations (UN DESA), and Moritz Kraemer, Chief Economist and Head of Research at LBBW Bank and former Global Sovereign Chief Ratings Officer at S&P Global.

Webinar video: Link

UN DESA paper: Link

Stephany Griffith-Jones and Moritz Kraemer paper: Link to download

Written by:
Jenny Asuncion