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Shadow Sovereign Ratings

Author

Listed:
  • Canuto, Otaviano

    (World Bank)

  • Mohapatra, Sanket

    (World Bank)

  • Dilip Ratha

    (World Bank)

Abstract

Sovereign ratings are a necessary condition for countries to fully access international capital. Even if the sovereign government is not issuing bonds, the sovereign rating often acts as a ceiling for the private sector and can influence its international capital market access. However, 58 developing countries are still not rated by Standard and Poors, Moodys, and Fitch, the three international credit rating agencies. This premise presents an exercise to predict shadow sovereign ratings to estimate where unrated countries would lie on the credit spectrum if they were rated. Contrary to popular perception, unrated countries are not necessarily at the bottom of the rating spectrum.

Suggested Citation

  • Canuto, Otaviano & Mohapatra, Sanket & Dilip Ratha, 2011. "Shadow Sovereign Ratings," World Bank - Economic Premise, The World Bank, issue 63, pages 1-6, August.
    • Handle: RePEc:wbk:prmecp:ep63
    as

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    References listed on IDEAS

    as
    1. Alexander Lehmann, 2004. "Sovereign Credit Ratings and Private Capital Flows to Low‐income Countries," African Development Review, African Development Bank, vol. 16(2), pages 252-268.
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    6. Carmen M. Reinhart, 2002. "An Introduction," The World Bank Economic Review, World Bank, vol. 16(2), pages 149-150, August.
    7. Canuto, Otaviano & Mohapatra, Sanket & Dilip Ratha, 2011. "Shadow Sovereign Ratings," World Bank - Economic Premise, The World Bank, issue 63, pages 1-6, August.
    8. Lee, Suk Hun, 1993. "Are the credit ratings assigned by bankers based on the willingness of LDC borrowers to repay?," Journal of Development Economics, Elsevier, vol. 40(2), pages 349-359, April.
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    10. Ratha, Dilip & De, Prabal K. & Mohapatra, Sanket, 2011. "Shadow Sovereign Ratings for Unrated Developing Countries," World Development, Elsevier, vol. 39(3), pages 295-307, March.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    AAA; credit ratings; moody's; fitch; standard and poors; credit; credit ratings; World Bank; developing countries; soverign debt;
    All these keywords.

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • F3 - International Economics - - International Finance
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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