Sovereign risk: a world without risk-free assets?

BIS Papers No 72
July 2013

This volume presents and summarises the proceedings of a one-and-a-half day seminar on sovereign risk hosted by the BIS in January 2013. The event brought together senior central bankers, sovereign ratings analysts, fund managers and other market participants, sovereign legal specialists, risk managers at financial institutions and academics.

In the first panel, three central bank governors discuss sovereign risks and challenges, drawing on their own varied experiences. The second panel addresses the sovereign rating business from a number of angles. The third panel considers the polar case of financial markets without a risk-free sovereign. The fourth panel features legal experts  describing how market participants have adapted to the absence of a general legal insolvency framework for the default of a sovereign. The fifth panel looks at sovereign risk management in financial institutions. In a Foreword, the General Manager of the Bank for International Settlements sets down his impressions from the day and a half.

Sovereign risk: a world without risk-free assets?

Panel 1 - Policy panel

Lunch speech

Panel 2 - Rating agencies and sovereign risk

Panel 3 - Financial markets without a risk-free sovereign

Dinner speech

Panel 4 - Legal perspectives on sovereign default

Panel 5 - Risk managers on default probability for prime sovereigns

Annex: Historical document