COUNTRY RISK ASSESSMENT OF THE BANKING SECTOR: COMPARATIVE ANALYSIS

The purpose of this research is to conduct a comparative assessment of the country risk of the banking sector of the countries of the world using the methods BICRA from S&P and Bloomberg.

Methodology. As the main research methods were used: generalization, BICRA from S&P and Bloomberg methods, comparative analysis.

Originality/value of the research. The article provides a comparative analysis of the results of the assessment of country risks of the banking sector of the countries of the world according to the BICRA from S&P and Bloomberg methods based on current data for the last 3 years.

Findings. The results of the analysis showed that despite the diff erence between the BICRA from S&P and Bloomberg methods, the results are generally almost identical. There are exceptions in some countries.

According to the authors, this is due to the presence of accounting for currency risks in the Bloomberg methodology.

1. Giovannini, A., Iacopetta, M. and Minetti, R. (2013). Financial markets, banks, and growth: Disentangling the Links. Documents de Travail de l’OFCE, 131, 105–47.

2. Athari, S. A. (2021). Domestic Political Risk, Global Economic Policy Uncertainly, and Banks’Profi tability: Evidence from Ukrainian Banks. Post-Communist Economies, 33, 458-483.

3. Bucci, A., and Marsiglio, S. (2019). Financial Development and Economic Growth: Long-run Equilibrium and Transitional Dynamics. Scottish Journal of Political Economy, 66, 331–59.

4. Nguyen, Phuc Tran, and Trinh Thi Tuyet Pham (2021). The Impact of Financial Development onEconomic Growth: Empirical Evidence from Transitional Economies. Journal of Asian Finance, Economics and Business, 8, 191-201.

5. Ruziyeva, E. A., Nurgaliyeva, A. M., Duisenbayeva, B. B., Assanova, A. B., and Shtiller, M. V. (2019). Analysis of investments role in the economic development. Bulletin of National Academy of sciences of the Republic of Kazakhstan, 2(378), 189-198.

6. Turgenbaev, N. A. and Kantarbaeva, A. (2020). Prjamye inostrannye investicii v bankovskom sektoreKazahstana. Economics: Strategy & Practice, 4(15), 150-162 (In Russian).

7. Kulanov, A. and Nurgaliyeva, A. М. (2022). Comparative analysis of portfolio investment: world and domestic practice. Bulletin of the Karaganda university, 2(107), 62 – 70.

8. Svjatov, S. A. and Svjatova, M. A. (2020). Sistemno znachimye banki v nacional'noj jekonomike: kriteriiidentifi kacii, rol' i podhody k regulirovaniju. Central Asian Economic Review, 4, 127-135 (In Russian).

9. Sofronova, V. V. and Pleskova, I.A. (2015). Stranovoj risk v bankovskoj dejatel'nosti. Finance & Credit,14 (638), 21-30 (In Russian).

10. Timurlenk, Ö., and Kaptan, K. (2012). Country Risk. Procedia – Social and Behavioral Sciences, 62,1089-1094.

11. Al-Shboul, M., Maghyereh, A. and Molyneux, P. (2020). Political Risk and Bank Stability in the MiddleEast and North Africa. Pacifi c-Basin Finance Journal, 60, 1-27.

12. Wu, J., Yao, Y., Chen, M. and Jeon, B.N. (2020). Economic Uncertainty and Bank Risk: Evidence fromEmerging Economies. Journal of International Financial Makets, Institutions and Money, 68, 1-31.

13. Fatma, Z. and Suza, Z. (2010). The Determinants of Foreign Direct Investment Flows in EU: DynamicPanel Data Analysis. Business and Economics Research Journal, 1, 67-83.

14. Wu, J., Li, H., Zheng, D. and Liu, X. (2021). Economic Uncertainty or Financial Uncertainty? AnEmpirical Analysis of Bank Risk-Taking in Asian Emerging Markets. Finance Research Letters, 39, 1-10.

15. Caldara, D., Fuentes-Albero, C., Gilchrist, S. and Zakrajšek, E. (2016). The Macroeconomic Impact ofFinancial and Uncertainty Shocks. European Economic Review, 88, 185-207.

16. Popp, A. and Zhang, F. (2016). The Macroeconomic Eff ects of Uncertainty Shocks: The Role of the Financial Channel. Journal of Economic Dynamics and Control, 69, 319-349.

17. Al-Shboul, M., Maghyereh, A. and Molyneux, P. (2020). Political Risk and Bank Stability in the MiddleEast and North Africa. Pacifi c-Basin Finance Journal, 60, 1-27.

18. Gangemi, M., Brooks, R. and Faff , R. (2000). Modeling Australia’s country risk: a country beta approach. Journal of Economics and Business, 52, 259–76.

19. Teles, V. and Andrade, J. (2008). Monetary policy and country risk. Applied Economics, 40, 17–24.

20. Sherry, Yu. (2017). Sovereign and bank Interdependencies |Evidence from the CDS market". Researchin International Business and Finance, 39, 68-84.

21. Criteria Financial Institutions Banks: Banking Industry Country Risk Assessment Methodology andAssumptions (2021). Standard & Poor’s Financial Services LLC. Retrieved November 28, 2022, from https://www.maalot.co.il/Publications/MT20220508002215.PDF

22. Banking Industry Country Risk Assessments (2019). S&P Global Ratings. Retrieved November 28,2022, from https://www.spglobal.com/ratings/en/research/articles/190827-banking-industry-country-riskassessment-update-august-2019-11125735

23. Banking Industry Country Risk Assessment (2020). S&P Global Ratings. Retrieved November 28, 2022, from https://www.spglobal.com/ratings/en/research/articles/200501-banking-industry-country-riskassessment-update-april-2020-11473426

24. Banking Industry Country Risk Assessment (2021). S&P Global Ratings. Retrieved November 28, 2022, from https://www.spglobal.com/ratings/en/research/articles/210225-banking-industry-country-riskassessment-update-february-2021-11849707

25. Banking Industry Country Risk Assessment (2022). S&P Global Ratings. Retrieved January 15, 2023,from July 2022 https://www.maalot.co.il/Publications/CG20220801122107.PDF

26. Bloomberg. Retrieved January 15, 2023, https://www.bloomberg.com/.