Title

Credit Analysis And International Loans

Comments

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Keywords

Management

Abstract

The magnitude of the current debt crisis is forcing a reexamination of the effectiveness of political and credit risk analysis and a reconsideration on the part of international banks of loans to sovereign borrowers. This paper examines the problem of predicting the creditworthiness of sovereign borrowers. Creditworthiness, a somewhat vacuous notion has been used by international bankers to indicate the political and economic risk associated with loans to soverign borrowers. Creditworthiness as it is used by lending institutions is based on a number of factors including: a country's balance of payments; it's debt service ratio as well as the quality leadership for managing the nation's economy. A thesis of this article is the reality that none of the characteristics of an economy's behavior, GNP, exports, imports, inflation, debt service, et cetera form the basis alone or in combination for judging creditworthiness. Recent payment problems with sovereign borrowers have also encouraged a shifting in lending practices toward corporate borrowers. The shift in lending toward corporate borrowers has encouraged a reconsideration of an effective credit analysis system the dimensions of which form the parameters of this discussion.

Journal Title

Management International Review

Volume

26

Issue/Number

1

Publication Date

1-1-1986

Document Type

Article

Language

English

First Page

56

Last Page

63

WOS Identifier

WOS:A1986A556600006

ISSN

0025-181X

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