Commentary: Outlook on Global Sovereign Debt
30 March 2010 door SEI Investment Management Unit
When global markets began their downward spiral a few years back, nearly every nation felt the pain. The coordinated efforts of central banks and governments around the world helped avoid systemic collapse, and the global economy has been on the road to recovery since March 2009. However, fears about sovereign debt have escalated in recent months as the global recession has forced governments to run massive deficits.
Greece and peripheral Europe have recently dominated the headlines, but other developed nations haven’t been spared. Credit-rating agencies have discussed potential downgrades for both the United States and the United Kingdom from their current AAA ratings due to the dramatic increase in both nations’ total debt levels with respect to their gross domestic products (GDPs). The media attention has led to speculation about possible sovereign debt defaults and raised questions about the viability of investing in sovereign debt securities issued by developed nations.
