Political Credit Risk, also known as Sovereign Risk, emerges from actions by a foreign government that can influence the management of a foreign business, affect control over its assets, and impact its capacity to meet financial obligations towards its creditors.
Sovereign risk, also known as political credit risk, refers to the risk that a foreign central government will default on its loan obligations or fail to honor other financial commitments, potentially leading to financial loss for investors.
Discover comprehensive accounting definitions and practical insights. Empowering students and professionals with clear and concise explanations for a better understanding of financial terms.