Financial Times
July 14, 2011
An overly indebted, uncompetitive economy, after years of soaring labour costs, growing current account deficits, and with seemingly no export products to sell. A banking system at the brink of runs and a sovereign in need of a massive IMF-EU bail out. Default and devaluation seem the only way out. Greece today? No, Latvia in early 2009.
That was then, when Latvia’s 5-year CDS spreads peaked at 1200bps. Roughly two years later, Latvia has been moved back to investment grade rating, CDS spreads are close to 200bps and the government recently successfully issued an international bond.
Indeed, CDS spreads in CEE today are a fraction of those in Greece, Ireland and Portugal, and most of them trade even inside Italy and Spain these days. Sovereign ratings are also moving in opposite directions.
Are there lessons to learn from the CEE’s rebound?
More
No comments:
Post a Comment