UBS: Which Countries are at Greatest Risk of Default?
There has been a lot of talk lately about the global financial crisis and some of its possible repercussions.
Some analysts fear that the countries involved in the global meltdown will have no choice but to default on their debts. Others are hopeful that a solution will be reached before that happens.
“As the deadline for the EU summit approaches, markets are more hopeful of a solution to the European sovereign debt crisis,” writes Mamta Badkar of Business Insider. “EU leaders are considering temporarily doubling the euro bailout fund by letting the EFSF [European Financial Stability Facility] continue running after the European Stability Mechanism (ESM) becomes effective.”
And although the borrowing costs of countries like Italy and Portugal have declined slightly, the balance sheets of many eurozone (and non-eurozone) countries are extremely weak (and that’s being generous).
To get an overview of just how bad off some of these countries really are, writers at Business Insider thought it would be interesting to pull data from UBS analyst Andrew Cates’ aggregate balance sheet risk index.
“The factors that help determine balance sheet risk include credit market stress, high banking sector leverage as measured by loan-deposit ratios, and substantial public sector debt as a percentage of GDP,” Badkar explains.
However, and this is important to keep in mind, the aforementioned criteria are not the only factors that determine a country’s risk of defaulting.
“Just as important as the country’s ability to repay its debt, is its willingness to pay, and enact crucial structural reforms.”
Here is UBS’ list of the countries with a high risk of defaulting:
Photo 1 of 20
Credit to GDP ratio: 5.1 percent
Loan deposit ratio: 147 percent
Public sector debt as a percent of GDP: 92.7 percent
Total score: 4.8
Photo 2 of 20
Credit to GDP ratio: 24.6 percent
Loan deposit ratio: 106.3 percent
Public sector debt as a percent of GDP: 54.2 percent
Total score: 4.8
(Photo: Pope John Paul II & anti-Soviet Polish leader Lech Wałęsa)
Photo 3 of 20
Credit to GDP ratio: 21.2 percent
Loan deposit ratio: 113.3 percent
Public sector debt as a percent of GDP: 35.3 percent
Total score: 5.1
Photo 4 of 20
Credit to GDP ratio: 24.8 percent
Loan deposit ratio: 214.9 percent
Public sector debt as a percent of GDP: 54.3 percent
Total score: 5.1
(Photo: Norway's Crown Prince Haakon and his bride Crown Princess Mette-Marit)
Photo 5 of 20
Credit to GDP ratio: 23.4 percent
Loan deposit ratio: 199.3 percent
Public sector debt as a percent of GDP: 81.7 percent
Total score: 5.1
(Photo: Canadian hockey legend Paul Henderson scores the winning goal against the Soviets in game 8 of the 1972 Summit Series)
Photo 6 of 20
Credit to GDP ratio: 25.3 percent
Loan deposit ratio: 165.2 percent
Public sector debt as a percent of GDP: 118.4 percent
Total score: 5.2
(Photo: Disgraced former Prime Minister Silvio Berlusconi)
Photo 7 of 20
Credit to GDP ratio: 19.9 percent
Loan deposit ratio: 156.4 percent
Public sector debt as a percent of GDP: 50 percent
Total score: 5.3
(Photo: Carl Gustaf Mannerheim, hero of Finland’s Winter War against the Soviet Union.)
Photo 8 of 20
Credit to GDP ratio: 36 percent
Loan deposit ratio: 102.6 percent
Public sector debt as a percent of GDP: 16.6 percent
Total score: 5.3
Photo 9 of 20
Credit to GDP ratio: 15.7 percent
Loan deposit ratio: 158.7 percent
Public sector debt as a percent of GDP: 66 percent
Total score: 5.4
Photo 10 of 20
Credit to GDP ratio: 27.3 percent
Loan deposit ratio: 237.6 percent
Public sector debt as a percent of GDP: 41.7 percent
Total score: 5.4
Photo 11 of 20
Credit to GDP ratio: 22 percent
Loan deposit ratio: 98.1 percent
Public sector debt as a percent of GDP: 100.2 percent
Total score: 5.5
(Photo: Ambassador Jan Matthysen of the Kingdom of Belgium with U.S. President Barack Obama.)
Photo 12 of 20
Credit to GDP ratio: 19.4 percent
Loan deposit ratio: 163.6 percent
Public sector debt as a percent of GDP: 84.2 percent
Total score: 5.5
(Photo: French President Nicolas Sarkozy.)
Photo 13 of 20
Credit to GDP ratio: 44.1 percent
Loan deposit ratio: 346.1 percent
Public sector debt as a percent of GDP: 44.2 percent
Total score: 5.6
Photo 14 of 20
Credit to GDP ratio: 21 percent
Loan deposit ratio: 123.6 percent
Public sector debt as a percent of GDP: 85.3 percent
Total score: 5.8
(Photo: President of the Republic of Hungary Pál Schmitt.)
Photo 15 of 20
Credit to GDP ratio: 35.2 percent
Loan deposit ratio: 150.5 percent
Public sector debt as a percent of GDP: 76.7 percent
Total score: 6
(Photo: British Prime Minister David Cameron.)
Photo 16 of 20
Credit to GDP ratio: 55.7 percent
Loan deposit ratio: 117.7 percent
Public sector debt as a percent of GDP: 130.2 percent
Total score: 6.1
Photo 17 of 20
Credit to GDP ratio: 66 percent
Loan deposit ratio: 223 percent
Public sector debt as a percent of GDP: 63.5 percent
Total score: 6.3
Photo 18 of 20
Credit to GDP ratio: 53.6 percent
Loan deposit ratio: 189.2 percent
Public sector debt as a percent of GDP: 83.1 percent
Total score: 7
Photo 19 of 20
Credit to GDP ratio: 56.1 percent
Loan deposit ratio: 187.3 percent
Public sector debt as a percent of GDP: 99.4 percent
Total score: 7.6
Photo 20 of 20
[Note: All data is for 2010. The Balance Sheet Risk index depends on several indicators that include public sector debt as a percent of GDP; loan to deposit ratio (which measures of banking sector stress); and credit to GDP ratio (which measures credit market stress). Credit market is the broader market through which companies try to raise funds through debt sales. It also includes indicators of external fragility, like current account balance to GDP ratio, and external debt to GDP ratio among others.]
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Comments (58)
leader30m
Posted on December 9, 2011 at 9:51amLock and Load…..this is Leader30m out!
Report Post »AmericanFightingMan1
Posted on December 8, 2011 at 8:57pm1. Most middle class Americans I know and met are generally good people who have been lost for about 40 years of over-indulgence in a sick American culture. Some things do need to come to an end, and I won’t miss it at all. Like the show Glee or Alec Baldwin. They are reminders of how sick we’ve become.
2. American cities are hell-holes and have been for about 40 years. See #1 above.
3. About 100-150 million good Americans exist. That is a lot. That is the size of the nation around WWII. Downside, demogaphically they are older and less vibrant. Upside, they are (a bit) wiser. Still, a sizeable force.
4. Our enemies are on two sides. One, the corporate servants. All hail the corporate power and money. Madoff and his ilk. Sorry, gotta go. Two, the socialists/communists. This is Barry and Co. Hilary, Boxer, Sharpton, Feinstein, Murray, Jesse J., Holder, Schumer, Spector, Reid, etc. These are your modern day soviets.
5. Look at Bush like the Czars of old. Hated. Decadent. Obsolete. Look at Barry as the Leninists. Young, energetic, hateful. This is where we are. Same as before the Bolshevics did their evil deeds. They agitated and agitated until economics got so bad that people were easy pickens to do their bidding and then, STRIKE! That is what Barry wants. He is Lenin. He hates liberty. He has contempt for the U.S. 1917 fast approaches. The Soviet Union then arose in 1922.
6. Read about the bolshevic revolution.
Report Post »quiltgal
Posted on December 8, 2011 at 8:00pmFor years, my liberal friends have been arguing that Sweden is the perfect example of how socialism works when done “properly.” They said we should emulate Sweden in order to have the perfect society. For years, I’ve been telling them that socialism can never be done properly. It is a downhill system that eventually causes everybody to lose, just wait and see.
Now Sweden has the “coveted” No. 10 spot on a most-likely-to-default list. Unfortunately, if we have another 4 years of Democrat rule under Obama, or another 4 years of weak Republican leadership, the U. S. may even surpass Sweden on that list. America could possibly become a case study in how to go from No. 1 winner to No. 1 loser almost in the blink of an eye.
We need a STRONG and GENUINE conservative to win the Republican primary. Because a wimpy RINO will make us fail just like Sweden.
Report Post »AmericanFightingMan1
Posted on December 8, 2011 at 9:11pmYou are right. Socialism only seemed to work in Sweden given that it WAS homogeneous and thus easier to harmonize in terms of government control. Now Sweden is collapsing from within. Hedonism is supreme. Women no longer aspire to be mothers. Careers supplant families. Entertainment. Excitement. Death of a people. Unless, of course, they pull their collective heads out of their a…
Report Post »Snowleopard {gallery of cat folks}
Posted on December 8, 2011 at 7:31pmGlenn it would probably be easier to show which countries of the EU and the world would not wind up defaulting, it would be mucn shorter.
Report Post »Unix
Posted on December 8, 2011 at 7:39pmyeah, it will be an empty list…
Report Post »progressiveslayer
Posted on December 8, 2011 at 7:19pmNo Chance of Default, US Can Print Money: Greenspan – CNBC
EXCERPTS:
“The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default” said Greenspan on NBC’s Meet the Press. “What I think the S&P thing did was to hit a nerve that there’s something basically bad going on, and it’s hit the self-esteem of the United States, the psyche” said Greenspan.” Opinions on this quote?
Report Post »Vechorik
Posted on December 8, 2011 at 7:22pmJust heard Germany pulled out of the EU?!!?
Report Post »Unix
Posted on December 8, 2011 at 7:31pmLOL, the Wiemar Republic did the same thing we are doing, and we all know how that turned out right! STAGFLATION, then civil unrest, then…Hitler, then WWII…the ONLY thing missing here is the WWIII…we have all the rest. KAPUT!
Germany did not pull out of the EU, where did that come from responder?
Report Post »Russman
Posted on December 8, 2011 at 7:37pmI don’t think Germany has pulled out of the Eu………………….
Report Post »SmallGovBigGuns
Posted on December 9, 2011 at 10:33aman example of a keynesian economic economist that should only keep his beliefs inside a vacuum in the back room of his house. these keynesian believers live in la la land and think they can get out of any mess by following their economics made for an ideal world and apply it to the real world.
Report Post »i equate it to trying to force the idea of socialism to the real world. it just doesnt work
angelonquest2000
Posted on December 10, 2011 at 4:25pmengland pulled out of the EU…
Report Post »americathebankrupt
Posted on December 8, 2011 at 7:16pmWho is the 80iq person that did not post the list.
Report Post »jamestoms
Posted on December 8, 2011 at 7:11pmQuick Start printing more money! Sell more burgers and Pizza‘s we’ll be Ok! Lets all go shopping :0) It’s a Wonderful Life, I know, I just saw it on TV!!!
Report Post »jakartaman
Posted on December 8, 2011 at 7:03pmStay tuned kids its unfolding faster than I would have predicted.
Report Post »It is also not a laughing matter – its real and it will be upon us soon.
Please be prepared and help those that you can – especially the believers
Even my wife thinks I am a nut – but the Holy spirt is guiding me and I know I am doing right.
Lets keep our civility and our souls in tack and let the almighty have his will
Unix
Posted on December 8, 2011 at 7:37pmI’m on board…but this collapse will not be civil…you will find yourself in a world of hurt trying to help everyone…
Report Post »angelonquest2000
Posted on December 10, 2011 at 4:24pmthe holy spirit is leading us too…just listen and lead on, my hubby thinks im crazy too….the crash seems like it will be quick! the rollarcoaster has picked up speed! God Bless!
Report Post »Psychosis
Posted on December 8, 2011 at 6:54pmWe won. …..says obama
Time to pay your bill…………………….says the public
Report Post »Gary_K
Posted on December 8, 2011 at 6:45pmI have a question.
Of these countries most likely to fail, which country’s leaders lie the most ?
Ya only get one try at the correct answer.
Report Post »Unix
Posted on December 8, 2011 at 7:38pmTHEY ALL lie the most!
Report Post »Outlaw_Josey_Wales
Posted on December 8, 2011 at 6:36pmWhich country is going to make the biggest splash when it defaults on it debt?
Report Post »Unix
Posted on December 8, 2011 at 6:42pmWell, of course, the USofA!
Report Post »BlackCrow
Posted on December 8, 2011 at 6:25pmWhat is not reported in those numbers is the State and local debt in the United States. When you include those numbers in the “public debt” column you get a number closer to 19 trillion dollars putting the public debt well over 100% of GDP. Then when you look at total government spending, Local, State< and Federal that is eating up over 50% of GDP completely discounting the public debt.
"I think we can make better use of those deck chairs if we move them to the starboard side" Capt of the HMS Titanic.
Report Post »Unix
Posted on December 8, 2011 at 6:30pmIndeed, but if you add up ALL debt it is $55 TRILLION, no one is paying that off. blub blub blub
Report Post »sgtstubbs
Posted on December 8, 2011 at 6:40pmThanks I did not take that in consideration but you are right.
Report Post »Unix
Posted on December 8, 2011 at 6:23pmYa, all my friends and relatives laugh at me, even my immediate family! Well, they won’t be laughing at the prepper for long. And my extended family…hmmm….and friends….and neighbors…hmmmm, who turned their backs on me and laughed….hmmmm, all I gotta say is don‘t come on mr gilmore’s property, I’ll excorcize you to hell.
As prepped as I am, I still feel more lead is necessary. This is going to be the biggest CF in world history, and all of these sheeple will be scurrying…in panic, and I’ll be there to help them, if I can, and they be civil about it…otherwise, they are deep 6…catch my drift.
Report Post »Unix
Posted on December 8, 2011 at 6:18pmYa’ll bogey men, come on over, I got some sweet s__t for ya…you better kiss yer arse goodbye first!
Report Post »jakartaman
Posted on December 8, 2011 at 6:06pmTick tock – tick tock – tick tock
Report Post »As the song says “Its only a matter of time”
“A prudent person foresees the danger ahead and takes precautions. The simpleton goes blindly on and suffers the consequences” Proverbs 27:12
jungle J
Posted on December 8, 2011 at 5:59pmwait till the boogeymans come out of the ghettos to take all your stuff….they willl roll over you like a tractor trailer.
Report Post »PenPatriot
Posted on December 8, 2011 at 6:05pmJust wait til you try to take it. Going to be a lot of dead bogeymen. Come to my place first please.
Report Post »JohnGalt
Posted on December 8, 2011 at 6:15pmYa I guess boogeymen will the first casualties.
Report Post »Unix
Posted on December 8, 2011 at 6:17pmWell sonny, if you are one of them, I feel sorry for you, come get my stuff!
Report Post »Unix
Posted on December 8, 2011 at 6:27pmjungle jimmy…if you‘re one of ’em, i hope you are first in line, but that won’t really matter, any place will do.
Report Post »Outlaw_Josey_Wales
Posted on December 8, 2011 at 6:29pmWarning to all bogeymen “Beware of flying ojects”
Report Post »progressiveslayer
Posted on December 8, 2011 at 7:03pmYour remark is mildly amusing,I mean we all know they can run pretty fast,the young bucks anyway,but they can’t outrun lead now can they boy? Come get some.
Report Post »jkisok
Posted on December 9, 2011 at 5:11ampolite “boogeyman” might get a handout in time of need, but a demanding or pilfering one will get thrown in a burn pit.
Report Post »REV19-11-16
Posted on December 8, 2011 at 5:57pmThe question is what is the risk. Greater under our new messiah, much less if we can get someone who really cares about getting this country back to creating real jobs. If the question was how bad would a default be, we should definitely top the list.
Report Post »Unix
Posted on December 8, 2011 at 6:31pmit won’t matter who we elect to tell the truth, this country crashed in ‘08, we live on life support, and the plug is about to be pulled. hate to break the bad news to ya
Report Post »dudeman4
Posted on December 8, 2011 at 5:53pmSo you can have your debt at 40-50% and still be at a big risk of default?
Report Post »Gonzo
Posted on December 8, 2011 at 5:46pmHey, we made the list! USA USA USA!
Report Post »gmoneytx
Posted on December 8, 2011 at 5:56pmThat’s funny and not at the same time?!?!
Report Post »paleoman
Posted on December 8, 2011 at 5:45pmSomebody buy that guy a bar of soap.
Report Post »sillyfreshness
Posted on December 8, 2011 at 5:41pmThis is a preview of next year:
http://www.prisonplanet.com/detention-camp-order-follows-preparations-for-civil-unrest.html
http://www.prisonplanet.com/exclusive-government-activating-fema-camps-across-u-s.html
Report Post »Unix
Posted on December 8, 2011 at 6:35pmthey won’t put me in one of those cages, I’ll bleed out first, but not before I take a bunch of communists with me….grrrrrrrrrrrrrr, and if I happen to survive that, those peckerwoods in DC will swing from trees!
Report Post »sillyfreshness
Posted on December 8, 2011 at 5:40pmLook for STHF in 2012!!
Report Post »mad_hatter_
Posted on December 8, 2011 at 5:38pmHave you seen Giuliani’s attack on Obama because of his lack of economic leadership: http://www.thedailycandidate.com/video/2011/dec/giuliani_obama_ignorant.html
It is because of Obama that our country should be on that list of high risk.
Report Post »JohnQTaxpayer
Posted on December 8, 2011 at 5:31pm17 trillion should put USA at the top of the list
1st and most important USA is broke, fiscally bankrupt, and we the people owe trillions of dollars to communist China. Furthermore we are 15 trillion in debt; “we the people” owe the remainder of the world 15 trillion dollars. If that is not bad enough we continue to borrow 41 cents for every dollar we spend. In 2012 the debt will be 17 trillion dollars; this money has already been spent. It would take you and two of your best friends spending each one million dollars 24/7 for 533 years to spend just 14 trillion dollars. We are in big trouble. Our government cannot or will not balance the federal budget. Several of the states are also facing bankruptcy in the coming years. There is a growing list of cities that have already gone bankrupt
Report Post »ChiefGeorge
Posted on December 8, 2011 at 5:36pmIts War or they turn us all over to be debt slaves for the Chinese debt….which do you think they’ll pick. They’ll pick the one that keeps them in the glory seat for sure.
Report Post »dnewton
Posted on December 8, 2011 at 8:04pmWhat I can not figure out is why the Chinese people seem OK with the loaning to the US money for infrastructure rather than spending it in China. It is hard to believe that the Chinese have miscalculated the rate of return on infrastructure when that infrastructure enables greater productivity. This would be like the administration helping Brazil build oil drilling infrastructure rather than building it in the US.
Report Post »asybot12
Posted on December 9, 2011 at 1:31am@dnewton,. Please do you really think the Chinese government is telling their people what they are doing? They have a billion people 700 million of them are still living in the Middle Ages. And BTW they still have not payed all the investors from the US and Europe back the money those investors borrowed them in the 60‘s and 70’s. Not A penny!
Report Post »TXPilot
Posted on December 8, 2011 at 5:25pmYay!!…we are in the top 20!!….Oh wait, that’s a really bad thing…..but, not a big surprise.
Report Post »Gonzo
Posted on December 8, 2011 at 5:49pm“”For the first time in my adult lifetime, I’m really proud of my country” We know how you feel now Michelle! USA USA USA!
Report Post »chips1
Posted on December 8, 2011 at 6:04pmWhat’s this WE thing? Obama spent it, Kenya should pay for it.
Report Post »