Chart of the Day: Sovereign Debt and Capital Flight

We thought this to be a very informative chart, which shows the percentage of a country’s sovereign debt held by domestic and foreign residents.   In general, the more a country’s debt is held by foreigners the higher the risk of capital flight and a sudden loss of confidence.  This increases “rollover risk” and the need for restructuring and/or bailout.  There is no coincidence Ireland and Greece have a high concentration of their public debt held by foreigners.    The table below on fiscal balances also shows that sovereign debt issues are not going away.

This entry was posted in Black Swan Watch, Bonds, Commodities, Credit, Currency, Fiscal Policy, News, Policy, Sovereign Risk and tagged , , . Bookmark the permalink.

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