Friday, July 16, 2010

Small countries bond rating may depend on strenght of private businesses, flipping old paradigm in "libertarian" fashion

Floyd Norris has an interesting perspective in the New York Times Business Day on Friday July 16, “How to Tell a Nation Is at Risk”, link (web url) here.

In smaller countries, the “strength” of the private sector may be the best indicator, and we could see the “libertarian” scenario of private business bailing out defaulting governments, In the past, defaulting governments might bring down companies, but now corporate bonding ratings in a country might turn the tables and provide a ceiling for a country’s ratings.

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