Free E-Book about Country Risk Analysis



VanEfferink_Kool_VanVeen_CountryRiskAnalysis_2003_Back_Cover_smallAffordable introductions to Country Risk Analysis are hard to find. A quick Amazon search shows that most books on this topic are rather expensive. One book I came across costs even more than £250. Fortunately you can still buy cheap second-hand copies of the excellent introductions by John Calverley and Thomas Krayenbuehl. To help out organisations and scholars with a small purse, GeoMeans now offers a free pdf version of a book that was published around 12 years ago.

In 2003, a small publishing house published a clear, concise and affordable introduction to Country Risk Analysis. The book was a co-production of Prof. Dr. Clemens Kool (Utrecht University), Prof. Dr. Tom van Veen (Maastricht University) and me. I was a Country Risk Analyst with a bank back then. If you click on the back cover image here on the right, you can read more on the book and its authors.

The book was sold out soon and the publisher never reprinted it. Consultation with my two co-authors and our publisher made clear that a re-issue of the book in another form would be an acceptable option to all parties involved. Actually, it is hard to think of a better moment to re-publish the book online as the third annual Country Risk Analysis Summer School (co-organised by GeoMeans) will start next month. After a brief description of the book, this post will conclude with the section where you can download the seven chapters.

Aim and Scope of the Book

VanEfferink_Kool_VanVeen_CountryRiskAnalysis_2003_Front_Cover_smallThe aim of this study is to present the state of the art of country risk analysis in 2002-2003. What is country risk? How can country risk be measured? Is it important to pay attention to country risk? What are the main results of research into country risk indicators? How do rating agencies and banks assess country risk and how do they use the results of country risk analysis? These are just a few questions to be addressed in this study. The study focuses on the relation between theory and empirical evidence. We will briefly discuss the management of country risk, in particular in the banking sector.

After the introduction in Chapter 1, the study is organized as follows. Chapter 2 discusses the concept of country risk, the interpretation of country risk and the way country risk is measured. In chapter 3 we discuss empirical research into country risk. Chapters 4, 5 and 6 deal with the practice of country risk analysis. Chapter 4 surveys country risk analyses and ratings that are provided by major credit rating agencies. Because rating agencies have become important providers of country risk analyses, we also discuss how these agencies construct risk ratings. Chapter 5 investigates how central banks and the Bank for International Settlements react to country risk as regards the supervision of commercial banks. In addition, we discuss international evidence of banks with cross-border lending and debt restructuring. Finally, chapter 6 focuses on the question how commercial banks measure and analyse country risk. Chapter 7 presents a summary and conclusions.

Download the chapters

The E-Book is not available in one part as that would become an enormous file that required a long download time. Instead, the pdf files below contain one chapter each, and their size varies between 1.8MB and 3.4MB. Please note that although this re-issue as a pdf version was realised in 2013, the book was originally published in 2003.

1 Introduction

2 Theoretical Approaches to Country Risk

2.1 What is Country Risk?

2.2 Theoretical Analysis of Country Risk

2.3 Conclusions

3 Country Risk Analysis: Empirical Results

3.1 Predicting Crises with Quantitative and Qualitative Risk Rating Methods

3.2 Methodological Problems in Empirical Research

3.3 Reproducing Qualitative Risk Ratings with Quantitative Methods

3.4 The Increasing Role of Financial Markets: Emerging Market Debt

3.5 Conclusions

4 Country Risk Analysis by Rating Agencies

4.1 The Suppliers of Country Risk Analysis

4.2 The Construction of Country Risk Ratings

4.3 Is There Much Difference Between Country Risk Indicators?

4.4 Conclusions

5 Banks and Country Risk – External Environment

5.1 Development of Cross-Border Bank Lending

5.2 Debt Restructuring

5.3 The Role of the Dutch Central Bank (DNB)

5.4 The Bank for International Settlements (BIS)

5.5 Conclusions

6 Banks and Country Risk – Internal Organization

6.1 Country Risk Organization of Banks

6.2 Country Risk Analysis at Banks

6.3 Country Ratings and Country Limits

6.4 Economic Capital

6.5 Conclusions

7 Summary and Conclusions


Country Risk Analysis


  1. Leonhart,
    Thank you for this interesting bok. In chapter 5.1 you explain the Dutch approach to capital and provisioning requirements for country risk. Since Basel rules want specific provisions, is this approach still valid ? Are there projects for a EU-wide harmonisation of this subject? Where could I find additional info? Many thanks for you help!
    Kind regards,
    Louis de Fauconval

  2. thank you Leonhardt

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