AN EARLY WARNING MODEL FOR INTERNATIONAL DEBT SERVİCİNG PROBLEMS

Date

1984

Author

YENER, Demir
MAMBRTTO, Fulvia

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The irapact of recent recession on debt servicing abüity of the de- velopiîîg countries was felt strongly by the international bankmg institutions and seriously threatened the international f mandal sys- tem. The increased risk exposııre doe to such loans necessitates the international banks to increaşe efficieııcy in international îoan analysis by considering some new approaches in addition to the existing meîhocîs. An appropriate approach in this regard appears to be the applscation of multivariate models in country credit risk analysis to predict the potentiaî of debt servicing probiems for developing countries. One soch technique, discriminant analysis, proved to be highly accurate in predicting the likelihood of debt probiems. The appîication of this technique, in addition to the traditional country risk assessment methods, should help reduce the risk exposure on a country signfficantly, resulting in the inc- reased efficiency in managing the international îoan portfolio.

URI

https://hdl.handle.net/11511/110914

Collections

Department of Economics, Article