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Showing posts with label Debt infographic. Show all posts
Showing posts with label Debt infographic. Show all posts

August 10, 2011

Credit ratings Comparison: S&P vs Moody's Vs Fitch

This collection of interactive maps shows credit rating for each country.

What is Credit Rating?

A credit rating estimates the credit worthiness of an individual, corporation, or even a country. A credit rating is also known as an evaluation of a potential borrower's ability to repay debt, prepared by a credit rating agency (CRA). Credit ratings are calculated from financial history and current assets and liabilities. Typically, a credit rating tells a lender or investor the probability of the subject being able to pay back a loan.

What is Credit Rating Agency (CRA)

A credit rating agency (CRA) is a company that assigns credit ratings for issuers of certain types of debt obligations as well as the debt instruments themselves. In some cases, the servicers of the underlying debt are also given ratings.

Standard & Poor's, Moody's Investor Service and Fitch Ratings are the big three credit rating agencies. Moody's and S&P each control about 40 percent of the market. Third-ranked Fitch Ratings, which has about a 14 percent market share, sometimes is used as an alternative to one of the other majors.

July 1, 2011

The Cost of Reducing government debt

The chart below shows OECD calculations of what it would take governments to reduce gross debt to 60% of GDP by 2026. This is around the level considered healthy and is also the ratio set by the widely ignored Maastricht agreement, which is meant to govern debt in the European Union. It is not pretty.
AMID strikes and violent public protests, on June 29th Greece's parliament voted in favour of the government's emergency package of austerity measures. The package, which requires a second vote to implement it on June 30th, is necessary. Without it, the European Union and the International Monetary Fund will not release another tranche of a large rescue loan to the country. And without the loan, Greece cannot afford to meet the interest payments on its monumental government debt. But because the package will bear down too heavily on ordinary Greeks without addressing necessary structural reform, it is likely to fail. Many other rich countries have big debt burdens and are facing similar problems.