Under the proposal, each nation would assume a portion of the total debt risk.
But steep falls in the value of Italian or Spanish government debt risk a wave of bank failures.
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There is also a planned deterioration of sovereign debt risk as compared to market prices in early May, the Committee said.
Bond managers assess debt risk by performing discovery on what is the sustainable gross domestic growth for the country compared to its debt.
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If interest rates were to rise in the U.S. during an economic slowdown as a result of the perceived higher debt risk, it would hurt the economy even more and possibly lead to another recession.
The problem with these stress tests is that they assumed that 80 % of Greek sovereign debt was risk-free, as all other debt issued by Euro members.
Banks, for example, have habitually treated their governments' debt as risk-free.
Additionally, she points to RIA accreditation and an extensive background check on the 50 certified financial planners who offer advice on everything from student loan debt to risk tolerance analysis and portfolio recommendations.
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However it remains an unused tool in our kit to reduce the debt, and the possibility of utilizing it lowers the risk of debt.
Treasury Secretary Geithner gave Congress until Aug. 2 to increase the debt limit or risk default.
In essence, they unbundle the interest on a debt from the risk that it is not paid back.
In the past, China's insurers were required to put the majority of their investments into low-risk debt securities like government bonds.
Countries that rely on other nations to buy their debt run a risk of becoming beholden to their creditors and having to trade sovereignty for liquidity.
Junk bonds, basically high-risk debt, once a popular way to speculate rather than invest, will not be considered in this article because of their volatility, unpredictability and risk.
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The Times said Lehman's chief executive, RichardFuldRichard Fuld, has drawn up plans in which one public entity would be spun off and consist entirely of mortgage debt and associated risk.
The downgrade to Italian debt was a signal that worry over Greece leaving the EU is mounting within the analyst community, and the economies most exposed to Greek debt are at risk.
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Buffett isn't offering to help the insurers with those problems, although by backing the low-risk debt on their books he at least gives them some extra capital to deal with the situation.
In theory, this helps the banks to reduce risk, makes money for intermediaries who trade the securities, and allows the investors to pick tranches of debt that match their risk appetite.
This is particularly controversial in Spain, because many of the holders of this type of debt are unsophisticated retail customers: horror stories are emerging of illiterate customers signing up for risk-bearing debt with their thumbprints.
If the CDS payout had not been triggered, the private sector investors would view the purchase of such sovereign debt as having significantly more risk, and that would result in a much higher interest cost of that sovereign debt to the issuing countries.
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These psychometric screening tools measure future upside potential rather than traditional risk management tools used by banks for debt contracts, which only measure downside risk.
But as they try to deal with one problem for example, debt reduction for Greece it creates the risk of uncertainty for sovereign debt for Italy and Spain.
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Bottom-fishers such as GE Capital have entered the market for high-risk mortgage debt.
For investors in emerging-market debt, however, risk is of more than theoretical concern.
The existing investment with debt may provide better risk-adjusted returns than can be achieved when reinvesting the prospective sales proceeds.
Additionally lower-quality debt securities involve greater risk of default or price changes due to potential changes in the credit quality of the issuer.
Another is that Asian banks are eager to lend to consumers, whom they rate as a far better credit risk than debt-laden companies.
Japan is positioned by size of its debt to be at risk of de-leveraging, but this is unlikely to happen in the immediate future.
The recent history of emerging market investing has been fraught with currency crises, massive fiscal and trade deficits, debt defaults, political risk and hyperinflation.
Today, as if it was a new revelation, a credit rating agency reported that U.S. banks are exposed to European debt and are at risk .
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