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Country Rating of Greece by Using Balance Sheet of Any Bank of Greece?

We cannot rate a country solely based on the balance sheet of one of its banks. Country ratings are determined by analyzing several key economic, social, and political factors. Recent assessments found Greece's GDP declined 6.2% and its balance of payments deficit decreased slightly, while its HDI remained high. However, political instability has increased as no party won a majority in recent elections. Major ratings agencies like FITCH have downgraded Greece further. An analysis of multiple ratings agencies and risk indicators assigns Greece an overall score of 60.64 out of 100, placing it in the "moderate risk" category.

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63 views3 pages

Country Rating of Greece by Using Balance Sheet of Any Bank of Greece?

We cannot rate a country solely based on the balance sheet of one of its banks. Country ratings are determined by analyzing several key economic, social, and political factors. Recent assessments found Greece's GDP declined 6.2% and its balance of payments deficit decreased slightly, while its HDI remained high. However, political instability has increased as no party won a majority in recent elections. Major ratings agencies like FITCH have downgraded Greece further. An analysis of multiple ratings agencies and risk indicators assigns Greece an overall score of 60.64 out of 100, placing it in the "moderate risk" category.

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satyadev_146
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© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Country rating of Greece by using Balance Sheet of any bank of Greece?

Answer:-We cant do the rating of the country by using the balance sheet of any bank of Greece. So we will see here the procedure of Country Rating by using ratings of Euro money, D&B, ECGC. The main factors which should be considered are: Economical factors:-includes GDP, BOP, Terms of Trade, Capital Flows, etc. Social factors:-Includes HDI, natural resources, Human resources, etc. Political Factors:-Include system of governance, political stability, etc.

GDP growth in Greece is -6.2% (Q1 2012 compared with Q1 2011). BOP decreased from 2.9 to 2.7Billion US $. No change in value of HDI (0.861) which is very good stands at 29 out of 187. Political crisis: There was election on May 6th, 2012 and no party has won enough seats to govern alone, and they failed to reach a coalition deal. So there will be re election on 17 June, 2012. FITCH has already cut Greece rating from B- to CCC. And if new govt. Is not able to continue to be part of EU, then there will be bankruptcy. Following weightings has been assigned:-

Ratings by ECGC Other parameters by Euro Money Grades by D&B Credit Ratings by Euro Money

40% 20% 30% 10%

1. Euro Money Country Risk evaluates the investment risk of a country, such as risk of default on a bond, risk of losing direct investment, risk to global business relations etc. Factors included are: Political Risk (30%) Economic Performance (30%) Structural Assessment (10%) Debt Indicators (10%) Credit Ratings (10%) Access to Bank Finances/Capital markets (10%)

Ratings By EURO Money is http://www.euromoney.com/Article/2773235/Country-risk-March-2011-Country-rankingsand-acknowledgements.html

2. Grades by D&B:-D&B divides the countries into 26 grades and according to grades marks are assigned. Ex.- DB1a30marks etc. A document has been provided by D&B which will help in giving rating to agencies based on financial strength. Ratings by D&B is http://www.dnbcountryrisk.com/

3. Ratings by ECGC:- It grades various countries in 7 levels based on marks scored. Its ratings are based on following factors and weights as follows: Economic Risk Political risk Economic & Political Relations Experience with other Forecast By ECGC 35% 20% 15% 10% 10%

ECGC has recently changed the buyer underwriting policy for Greece. i.e. Exporters will now have to take larger risk cover from ECGC; Jan 17,2012. Presently A2 is

rating given to Greece. Ratings by ECGC are A2 Country.

So, Following is the Country Rating for Greece:-

Criteria Credit Money Other Parameters by EURO money Grades by D&B(DB5a) Grades by ECGC(A2) Total rating by EURO

Rating/Weight 10%

Marks 3.96

20%

9.68

30% 40%

13.00 34.00 60.64

So, Total Score comes out to be 60.64 out of 100. And by ECGC classification it lies in the range of 60-75 and it has Category of Risk is Moderate.

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