Definition of Sovereign Risk

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TeachMeFinance.com - explain Sovereign Risk



Sovereign Risk -- 1. The risk to a lender that the government of a sovereign state may default on its financial obligations.
2. Also, the risk to a lender that unfavorable changes in the borrowers overall currency exchange position might imperil the payment of a loan.
3. Also the risk to a lender that unfavorable political events in the country of the debtor might imperil repayment.



About the author

Mark McCracken

Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English".


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