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The events that happened in Greece in recent weeks - and not only - showed the world that sovereign risk is present in today's global economy. Sovereign debt crises - which occur when an indebted state is no longer able to honor its commitments, have multiplied lately, but they should not be seen as a new phenomenon - the economic history offers numerous examples of such episodes. So, the State can default on its debt, with all the consequences that follow. In some circumstances, this near "bankruptcy" of one or more states may threaten the very stability of the international financial system and the development of the global economy, due to losses sustained by lenders. The real economic life shows that solutions to prevent over-indebtedness or getting out of this state can be identified only through a complex analysis, based on the entire system of financial and economic indicators, as the limits (thresholds) are highly mobile (and relative) from a country (or stage) to another, and from one organization to another. Managing sovereign risk in the current context represents a real challenge. [ABSTRACT FROM AUTHOR]

This article gives a fresh analysis of sovereign ratings, including the recent default of Greece. Section 1 studies the evolution of the sovereign rating business, and Section 2 explains how credit ratings are assigned. Section 3 focuses on sovereign rating methodologies and identifies the key determinants of sovereign ratings. Section 4 measures the accuracy of these ratings between 1 January 2001 and 1 January 2013. Section 5 compares credit ratings to market-based indicators, and Section 6 concludes. [ABSTRACT FROM AUTHOR]

The current economic situation in the uropean Union is critical due to the financial crisis and to sovereign debt. There are a few countries at risk of default, but the most immediate risk is posed by Greece and Italy. The Euro currency is threatened and the EU must take correct measures to prevent it from disappearing. There are quite a few approaches that governments take and each of them has risks and benefits. This paper presents the various suggestions of combinations of measures possible. The matter analyzed being very complex, and trying to simplify it, the paper presents a series of approaches possible in solving the problems that are afflicting the banking system and the EU countries. [ABSTRACT FROM AUTHOR]