imported>Doug Williamson |
imported>Administrator |
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| ''Credit risk - borrowings.''
| | One of a number of Gearing ratios. |
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| Debt distress is a situation in which a borrower is unable to meet its financial obligations to creditors.
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| Borrowers in default are - by definition - in debt distress.
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| However, debt distress is a broader concept, also including situations where the borrower has not yet defaulted on its borrowing obligations.
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| Debt distress is a more serious form of ''financial distress.''
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| :<span style="color:#4B0082">'''''Self-fulfilling dynamics in debt distress'''''</span>
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| :"Governments that are near or in debt distress do not have room to provide even temporary fiscal support to firms and households.
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| :Moreover, an increase in the risk of debt distress typically leads to a downgrade in the sovereign credit rating, which sets off self-fulfilling dynamics because the downgrade itself deteriorates macroeconomic fundamentals and the access to capital by private firms."
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| :''International Monetary Fund - World Development Report 2022 - p207.''
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| == See also == | | == See also == |
| * [[Credit rating]] | | * [[Cost of financial distress]] |
| * [[Credit risk]]
| | * [[Gearing]] |
| * [[Default]]
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| * [[Downgrade]]
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| * [[eurozone crisis]]
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| * [[Financial distress]]
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| * [[Firm]] | |
| * [[Fiscal]]
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| * [[Household]]
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| * [[Private]]
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| * [[Private sector]]
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| * [[Recession]]
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| * [[Rescheduling]]
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| * [[Restructuring]]
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| * [[Sovereign debt]]
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| * [[Sovereign debt crisis]]
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| * [[Sovereign risk]]
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| ==External link==
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| *[https://www.worldbank.org/en/publication/wdr2022 IMF - World Development Report - 2022]
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| [[Category:Accounting,_tax_and_regulation]]
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| [[Category:The_business_context]]
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| [[Category:Corporate_finance]]
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| [[Category:Long_term_funding]]
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| [[Category:Identify_and_assess_risks]]
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| [[Category:Manage_risks]]
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| [[Category:Risk_frameworks]]
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| [[Category:Risk_reporting]]
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