Author : Carlos Caceres
Publisher : International Monetary Fund
ISBN 13 : 1484321545
Total Pages : 34 pages
Book Rating : 4.4/5 (843 download)
Book Synopsis Understanding Corporate Vulnerabilities in Latin America by : Carlos Caceres
Download or read book Understanding Corporate Vulnerabilities in Latin America written by Carlos Caceres and published by International Monetary Fund. This book was released on 2016-04-07 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper analyzes the potential risks and vulnerabilities of non-financial corporates in Latin America and Canada. We quantify the impact of company-specific, countryspecific, and global factors in driving corporate spreads. Overall, we found that all these factors play a role in explaining corporate risk. In particular, country specific factors such as exchange rate and sovereign CDS spreads are significantly associated with changes in corporate spreads, underscoring the importance of solid policy frameworks. We also find that global conditions, such as the VIX, are dominant drivers of corporate spreads. In recent years, the adverse effects from deteriorating domestic conditions have been broadly offset by relatively bening global financial conditions. However, a sustained reversal in these conditions would put significant pressure on corporate risk.