This paper evaluates the dynamic relationship between sovereign credit default swap (CDS) and bond markets over the period 2001 to 2007 across 30 emerging markets. Our results suggest that the bond markets play a significant role in the price discovery process, which is in contrast with the...

We examine the effects of liquidity in the banking system (proxy for financial sector sophistication) and the degree of competition in the banking sector within a nation on sovereign risk. We hypothesize that more competitive and sophisticated financial systems will be less prone to panics or...

During the past two decades, many countries have embarked on a path of developing their financial markets, strengthening their technological base and stabilizing their economies. This paper finds that financial development and investment in information and communications technology (ICT) have...

We examine whether the banking sector within a nation is related to sovereign risk. We hypothesize that more competitive and sophisticated financial systems are less prone to panics or bank runs, and consequently will be associated with superior sovereign credit ratings. Using Ordered Probit...