المجلة الجزائرية للأمن الإنساني
Volume 10, Numéro 1, Pages 430-447
2025-01-01

Country Risk Ratings: Methodological Convergence And The Push For Greater Transparency

Authors : Bouhelais Mohamed Khalil . Berbache Antara .

Abstract

Differences in the evaluation methodologies adopted by global rating agencies contribute to significant disparities in the risk ratings of the same country, causing confusion and diminishing investor confidence. Each agency relies on different models and criteria in its risk assessments, leading to variations in the country's ratings depending on the agency. This inconsistency weakens the objectivity of these evaluations, making it difficult for investors to rely on them for decision-making. This study aims to conduct a comparative analysis of the current methodologies used by rating agencies to highlight their differences and similarities. The study concludes that adopting unified and shared methodologies could enhance the accuracy and consistency of ratings, thus boosting global investor confidence. It also emphasizes the importance of adopting transparent practices in the evaluation process and information disclosure. Additionally, the study proposes the need for methodological convergence in rating by establishing an international regulatory framework aimed at standardizing rating criteria and enhancing transparency, which would contribute to making risk assessments more consistent and reliable, thereby strengthening confidence in global markets.

Keywords

Country risk; ; Country Risk Ratings; ; Rating agencies; ; Methodologies of evaluation; ; Transparency in Ratings.