announcements, rather than traditional determinants like fiscal space and systematic risk, drove CDS adjustment over this period … mitigate the short-run fear of the worst economic outcomes, temporarily pushing away concerns over fiscal risk …

importance of economic fundamentals in the pricing of sovereign risk varies over time. The key factors are trade openness and … in pricing sovereign risk prior to the crisis, but internal factors associated with the capacity to adjust to adverse …

When a sovereign faces the risk of debt default, it may be tempted to expropriate the private sector. This may be one … reason for why international investment in private companies has to take into account the sovereign risk. But the likelihood … of a transfer from the sovereign risk to corporate default risks may be mitigated by legal institutions that provide …