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Credit risk modelling: default probabilities for Portuguese municipalities


  • Janda, Karel
  • Moreira, David


This paper investigates whether the economic adjustment program and post-program surveillance contributed positively to the structural recover of the Portuguese economy. This examination was conducted observing evidences related to several objectives included in the programs and on a sample of data collected from local defaulted and non-defaulted municipalities. Our results confirm that the financial aid provided by EC, ECB, and IMF had a small impact on the internal economic adjustment. There is a residual positive impact from the implemented reforms to promote growth, jobs, public debt, deficit, and stability of the country’s financial sector. The evidence is revealed by the measurement of the key program achievements and by the indicators related to the current high default probabilities of a large number of local municipalities.

Suggested Citation

  • Janda, Karel & Moreira, David, 2016. "Credit risk modelling: default probabilities for Portuguese municipalities," MPRA Paper 74561, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:74561

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    References listed on IDEAS

    1. Janda, Karel & Zetek, Pavel, 2014. "The Impact of Public Spending on the Performance of Microfinance Institutions," MPRA Paper 55690, University Library of Munich, Germany.
    2. Holian, Matthew & Joffe, Marc, 2013. "Assessing Municipal Bond Default Probabilities," MPRA Paper 46728, University Library of Munich, Germany.
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    More about this item


    public finance; municipalities; default; international aid;

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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