Country Risk

This is the risk that the firm or organization is impacted or suffers loss – either directly or indirectly – as a result of adverse events or changes in circumstances in a country that the organization operates in or has business dealings with/in. These risks primarily arise where a country (or counterparties within that country) cannot pay obligations to foreign creditors. There are a variety of issues that give rise to country risk including political and regulatory changes, financial distress or war / civil unrest.