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Sovereign risk

• The special risks, if any, that attach to a security (or deposit or loan) because the borrower's country of residence differs from that of the investor's. Also referred to as country risk.

• Sovereign Risk refers to the fact that a foreign government can default on its promises. Moreover, a foreign government can prohibit or restrict all domestic corporations and agencies from re-paying their foreign currency denominated interest and principle payment.

• 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 it or guaranteed by it.

 
 

Follow this link for all the terms related to risk.

 
 Embedded terms in definition
 Agencies
Country risk
Currency
Default
Exchange
Foreign currency
Foreign exchange
Foreign
Interest
Risk
Security
Sovereign
Will
 
 Related Terms
 
Affiliate risk
Bankruptcy risk
Basis risk
Business and industry risk
Business risk
Call risk
Commercial risk
Company specific risk
Completion risk
Counterparty risk
Country economic risk
Country financial risk
Country risk
Country risk analysis models
Credit risk
Cross border risk
Currency risk
Currency risk sharing
Default risk
Diversifiable risk
Doctrine of sovereign immunity
Economic risk
Equilibrium market price of risk
Event risk
Exchange rate risk
Exchange rate risk capital budgeting
Exchange risk
Fallout risk
Financial risk
Firm specific risk
Flat price risk
Force majeure risk
Forecasting risk
Foreign exchange fx risk
Foreign exchange risk
Funding risk
Geographic risk
Herstatt risk
Idiosyncratic risk
Inflation risk
Insolvency risk
Interest rate risk
Interest rate risk management
Liquidity risk
Macro political risk
Market price of risk
Market risk
Market risk return function
Micro political risk
Mortality risk
Mortgage pipeline risk
Nondiversifiable risk
Nonsystematic risk
Operating risk
Operational risk
Overnight delivery risk
Pin risk
Political risk
Prepayment risk
Price risk
Product risk
Purchasing power risk
Rate risk
Regulatory pricing risk
Reinvestment risk
Residual risk
Reverse price risk
Risk
Risk adjusted discount rate
Risk adjusted profitability
Risk adjusted return
Risk arbitrage
Risk arrays
Risk averse
Risk capital budgeting
Risk classes
Risk controlled arbitrage
Risk free asset
Risk free rate
Risk indexes
Risk indifferent
Risk lover
Risk management
Risk management document
Risk neutral
Risk of technical insolvency
Risk premium
Risk premium approach
Risk prone
Risk return tradeoff
Risk reversal
Risk seeking
Risk transformation
Risk types
Riskless or risk free asset
Settlement risk
Shortfall risk
Sovereign
Specific risk
Systematic risk
Systematic risk principle
Theta risk
Total risk
Undiversifiable risk
Unique risk
Unsystematic risk
Value at risk
Value at risk model
Vega risk
Volatility risk

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