The risk that a central bank will impose foreign exchange regulations that will reduce or negate the value of FX contracts. Also refers to the risk of government default on a loan made to a country or guaranteed by it.
(1) The risk of government default on a loan made to a country or guaranteed by it; (2) The risk that a central bank will impose foreign exchange regulations that will reduce or negate the value of FX contracts.
The risk of a government defaulting in such a way as to prevent judicial enforcement of its debts.... more on: Sovereign risk
A trust can be an effective defence against the consequences of political or social unrest following war or other major change in a country. If political instability or uncertain future prospects damage personal wealth, trusts may be a reassuring solution.
financing made with the national government as contracting party. This is normally less risky than dealing with sub-sovereign bodies or local private companies (depending on the creditworthiness of these bodies). However, lenders are exposed to such acts of government as expropriation, transfer restriction, contractual and regulatory interference, breach of contract, devaluation and sovereign default, as well as political instability and civil commotion. Some of these risks can be insured, e.g. through the Multilateral Investment Guarantee Agency of the World Bank.
The risk to a lendor that the government of a sovereign state may default on its financial obligations.
The special risks, if any, that attach to a security because the country of issuance is different than the country of the investor.
The risk that a foreign state, or a state organisation, may seek to avoid a liability by plea of sovereignty. Also known as state credit risk.
The risk that a loss will be incurred due to a negative change in a foreign government's policies, its credit rating or its failure to fulfil a debt obligation.
(1) Risk of default on a sovereign loan; (2) Risk of appropriation of assets held in a foreign country.
