When Sovereigns Go Bankrupt: A Study on Sovereign Risk

The public debt crisis that Eurozone countries have experienced since 2010 has been accompanied by a resurgence of sovereign risk. Greece was obliged to restructure its debt in 2012. The credit position of even the wealthy countries is shakier than at any time since the Great Depression. Now more than ever it is essential to understand sovereign risk because the default of a country, or even its lack of credibility, is bound to jeopardize political stability and weaken the credit standing o...