Publication:
Default, Currency Crises, and Sovereign Credit Ratings

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creativeworkseries.issn1564-698X
dc.contributor.authorReinhart, Carmen M.
dc.date.accessioned2014-03-04T17:00:21Z
dc.date.available2014-03-04T17:00:21Z
dc.date.issued2002-05
dc.description.abstractSovereign credit ratings play an important part in determining countries' access to international capital markets and the terms of that access. In principle, there is no reason to expect that sovereign credit ratings should systematically predict currency crises. In practice, in emerging market economies there is a strong link between currency crises and default. Hence if credit ratings are forward-looking and currency crises in emerging market economies are linked to defaults, it follows that downgrades in credit ratings should systematically precede currency crises. This article presents results suggesting that sovereign credit ratings systematically fail to predict currency crises but do considerably better in predicting defaults. Downgrades in credit ratings usually follow currency crises, possibly suggesting that currency instability increases the risk of default.en
dc.identifierhttp://documents.worldbank.org/curated/en/2002/05/17737432/financial-crises-credit-ratings-bank-failure-default-currency-crises-sovereign-credit-ratings
dc.identifier.citationWorld Bank Economic Review
dc.identifier.doi10.1596/17199
dc.identifier.urihttps://hdl.handle.net/10986/17199
dc.languageEnglish
dc.language.isoen_US
dc.publisherWashington, DC: World Bank
dc.relation.ispartofseriesWorld Bank Economic Review
dc.rightsCC BY-NC-ND 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/3.0/igo
dc.subjectARREARS
dc.subjectASSET PRICE
dc.subjectBAILOUT
dc.subjectBAILOUTS
dc.subjectBALANCE SHEET
dc.subjectBANK DEBT
dc.subjectBANK FAILURES
dc.subjectBANKING CRISES
dc.subjectBOND
dc.subjectBONDHOLDERS
dc.subjectBUDGET DEFICIT
dc.subjectCAPITAL ACCOUNTS
dc.subjectCAPITAL INFLOWS
dc.subjectCOMMERCIAL CREDITORS
dc.subjectCOMMERCIAL DEBT
dc.subjectCREDIT RATING
dc.subjectCREDIT RATING AGENCIES
dc.subjectCREDIT RATINGS
dc.subjectCREDITORS
dc.subjectCREDITWORTHINESS
dc.subjectCRISES IN EMERGING MARKET
dc.subjectCRISES IN EMERGING MARKETS
dc.subjectCURRENCY
dc.subjectCURRENCY CRISES
dc.subjectCURRENCY CRISIS
dc.subjectCURRENCY OVERVALUATION
dc.subjectCURRENT ACCOUNT
dc.subjectCURRENT ACCOUNT BALANCE
dc.subjectDEBT
dc.subjectDEBT CRISES
dc.subjectDEBT CRISIS
dc.subjectDEBT DEFAULT
dc.subjectDEBT OUTSTANDING
dc.subjectDEBT PROBLEMS
dc.subjectDEBT RATING
dc.subjectDEBT RATINGS
dc.subjectDEBT REPAYMENTS
dc.subjectDEBT RESTRUCTURING
dc.subjectDEBT RESTRUCTURING AGREEMENT
dc.subjectDEBT SERVICING
dc.subjectDEFAULT PROBABILITY
dc.subjectDEFAULTS
dc.subjectDEPENDENT
dc.subjectDEPENDENT VARIABLE
dc.subjectDEPRECIATIONS
dc.subjectDESCRIPTIVE STATISTICS
dc.subjectDEVALUATION
dc.subjectDEVALUATIONS
dc.subjectDOMESTIC CURRENCY
dc.subjectDUMMY VARIABLE
dc.subjectECONOMIC DEVELOPMENT
dc.subjectECONOMIC POLICY
dc.subjectEMERGING ECONOMIES
dc.subjectEMERGING MARKET
dc.subjectEMERGING MARKET ECONOMIES
dc.subjectEMERGING MARKETS
dc.subjectEQUAL SHARE
dc.subjectEXCHANGE MARKETS
dc.subjectEXCHANGE RATE
dc.subjectEXCHANGE RATE CRISES
dc.subjectEXCHANGE RATE MECHANISM
dc.subjectEXCHANGE RATE REGIME
dc.subjectEXPLANATORY VARIABLE
dc.subjectEXPORT RATIO
dc.subjectEXPORT RATIOS
dc.subjectEXTERNAL DEBT
dc.subjectFEDERAL RESERVE
dc.subjectFEDERAL RESERVE BANK
dc.subjectFINANCIAL CRISES
dc.subjectFINANCIAL CRISIS
dc.subjectFINANCIAL DISTRESS
dc.subjectFINANCIAL MANAGEMENT
dc.subjectFINANCIAL MARKETS
dc.subjectFINANCIAL STRESS
dc.subjectFINANCIAL SUPPORT
dc.subjectFINANCIAL SYSTEM
dc.subjectFINANCIAL VULNERABILITY
dc.subjectFOREIGN CURRENCY
dc.subjectFOREIGN CURRENCY DEBT
dc.subjectGLOBAL DEVELOPMENT FINANCE
dc.subjectGLOBAL FINANCIAL SYSTEM
dc.subjectINCOME
dc.subjectINFLATION
dc.subjectINFLATION EPISODE
dc.subjectINFLATION RATE
dc.subjectINSTITUTIONAL INVESTOR
dc.subjectINSTITUTIONAL INVESTORS
dc.subjectINTEREST RATE
dc.subjectINTEREST RATE SPREADS
dc.subjectINTEREST RATES
dc.subjectINTERNATIONAL BANK
dc.subjectINTERNATIONAL CAPITAL
dc.subjectINTERNATIONAL CAPITAL MARKETS
dc.subjectINTERNATIONAL CREDIT
dc.subjectINTERNATIONAL ECONOMICS
dc.subjectINTERNATIONAL ECONOMY
dc.subjectINTERNATIONAL INTEREST
dc.subjectINTERNATIONAL INTEREST RATE
dc.subjectINTERNATIONAL LENDING
dc.subjectINTERNATIONAL MONETARY FUND
dc.subjectLIQUIDITY
dc.subjectLOAN
dc.subjectLOCAL CURRENCY
dc.subjectLONG-TERM DEBT
dc.subjectLOW-INCOME COUNTRIES
dc.subjectMACROECONOMIC INDICATORS
dc.subjectMARKET CONDITIONS
dc.subjectMARKET RISK
dc.subjectMISALIGNMENTS
dc.subjectMONETARY FUND
dc.subjectOUTPUT
dc.subjectOUTSTANDING DEBT
dc.subjectPOLITICAL ECONOMY
dc.subjectPRICE BEHAVIOR
dc.subjectPROBABILITY OF DEFAULT
dc.subjectREAL EXCHANGE RATE
dc.subjectRECESSIONS
dc.subjectREMEDIES
dc.subjectRESERVE
dc.subjectRESERVES
dc.subjectRISK OF DEFAULT
dc.subjectSAVINGS
dc.subjectSERIAL CORRELATION
dc.subjectSHORT-TERM CAPITAL
dc.subjectSHORT-TERM DEBT
dc.subjectSOVEREIGN BONDS
dc.subjectSOVEREIGN DEBT
dc.subjectSOVEREIGN DEFAULT
dc.subjectSOVEREIGN DEFAULTS
dc.subjectSOVEREIGN RATING
dc.subjectSOVEREIGN RATINGS
dc.subjectSOVEREIGN RISK
dc.subjectSTANDARD DEVIATION
dc.subjectSTANDARD DEVIATIONS
dc.subjectSTOCK RETURNS
dc.subjectTIME HORIZONS
dc.subjectTRACK RECORD
dc.subjectVOLATILITIES
dc.subjectWEIGHTS
dc.subjectWORLD INTEREST RATES
dc.subjectYIELD SPREADS
dc.titleDefault, Currency Crises, and Sovereign Credit Ratingsen
dc.typeJournal Articleen
dc.typeArticle de journalfr
dc.typeArtículo de revistaes
dspace.entity.typePublication
okr.date.disclosure2013-05-21
okr.date.doiregistration2025-05-06T11:37:49.817135Z
okr.doctypePublications & Research::Journal Article
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2002/05/17737432/financial-crises-credit-ratings-bank-failure-default-currency-crises-sovereign-credit-ratings
okr.globalpracticeFinance and Markets
okr.globalpracticeGovernance
okr.globalpracticeTrade and Competitiveness
okr.guid222411468149392308
okr.identifier.externaldocumentum000445729_20130521143827
okr.identifier.internaldocumentum17737432
okr.identifier.report77386
okr.journal.nbpages151-170
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2013/05/21/000445729_20130521143827/Rendered/PDF/773860JRN020020LIC00Currency0Crises.pdfen
okr.peerreviewAcademic Peer Review
okr.topicLaw and Development::Settlement of Investment Disputes
okr.topicFinance and Financial Sector Development::Debt Markets
okr.topicFinance and Financial Sector Development::Currencies and Exchange Rates
okr.topicPrivate Sector Development::Emerging Markets
okr.topicFinance and Financial Sector Development::Bankruptcy and Resolution of Financial Distress
okr.unitOff of Sr VP Dev Econ/Chief Econ (DECVP)
okr.volume16(2)
relation.isJournalIssueOfPublication48efb294-df1d-4b0e-9dda-da0c8b828633
relation.isJournalIssueOfPublication.latestForDiscovery48efb294-df1d-4b0e-9dda-da0c8b828633
relation.isJournalOfPublicationc41eae2f-cf94-449d-86b7-f062aebe893f
relation.isJournalVolumeOfPublicationffcd85e9-e3a4-4326-a422-23efe4820919
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