Publications

Agency’s ratings have remained stable or changes have been positive in Advanced Economies (AE), despite the negative impact of the war in Ukraine and the monetary policy tightening. On the contrary, rating changes have been mostly negative for Emerging Economies (EE), although mainly due to idiosyncratic factors.

Agencies’ Ratings have remained relative stable since the start of the COVID pandemic and through 2021. Changes have been mainly concentrated in Emerging Economies. Sovereign spreads have been clearly influenced by the strong and coordinated reaction of Central Banks in both Advanced Economies and Emerging Economies

Public debt levels have skyrocketed globally due to the increase in fiscal expenditure needed for public measures to fight the economic damage caused by the pandemic, and by the effects of the slump in economic activity.

Agencies' sovereign ratings and sovereign spreads in the CDS markets have remained relatively stable over the past year despite the current pandemic crisis and the large fiscal and economic activity deterioration, mainly due to the unprecedented support from fiscal and monetary policies

Following the financial crisis that led to a European sovereign crisis in 2012, the European Commission developed a roadmap for the creation of the banking union, based on three key pillars: the Single Supervisory Mechanism (SSM), the Single Resolution Mechanism (SRM) and the Deposit Guarantee Scheme (DGS).

In recent months we have witnessed a notable compression in sovereign CDS at the global level, in an economic scenario that is full of uncertainty and in which public debt is at an all-time high.

The search for yield and looser monetary policies across the board, favor sovereign spreads compression, despite a worsening global outlook, poorer incoming data and balance of risks, and the lack of improvement of fiscal disequilibria.

Against a background of increasing concerns on economic cycle strength and uprise of global trade tensions, the central banks' more dovish tone helps that financial tensions and global risk aversion remain bounded.