Chapter 2

Emerging Countries Sovereign Rating Adjustment using Market Information: Impact on Financial Institutions’ Investment Decisions

Dominique Guégana, Bertrand K. Hassania,b and Xin Zhaoa,    aUniversité Paris, Panthéon-Sorbonne, France,    bSantander UK, United Kingdom,    E-mail: dguegan@univ-paris1.fr, bertrand.hassani@santander.co.uk, xinzhao0617@gmail.com

Abstract

Assets, debts, and other financial products issued by emerging countries are usually considered more speculative than those issued by developed economies. Therefore, relying on traditional rating agencies to invest in these countries is problematic as the information used to assess the economic and market condition in these economies is quickly outdated. Consequently, both ...

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