Event Title

Credit Rating of Independent Catalonia

Session

Management, Business and Economics

Description

This paper aims of estimating the sovereign credit rating, which an international credit rating agency might grant to an independent Catalonia. For the international markets, such a qualification is very vital to determine the role of an independent Catalonia as a potential debtor. These qualifications are essentials to establish the capacity of financial obligations of the independence of Catalonia and the conditions under which Catalonia will have access to financial sources in the international financial markets. The sovereign risk is the risk assumed by the international creditors in order to lend funds to an independent state considering the legal actions taken against the debtor. An independent Catalonia will entail different mechanisms to finance its activities and influence its growth: taxes (fiscal policy), money creation and regulation of interest rates (monetary policy), and public debt issuance (economic and financial policy). This paper evaluates political, economic, and financial state of independent Catalonia and its potential implications in relation to European Union (EU) to assess Catalonia’s sovereign risk; hence it gives independent Catalonia BB credit rating.

Keywords:

Catalonia Independence, Spain, Credit Rating, European Union, Sovereign Risk

Session Chair

Edmond Hajrizi

Session Co-Chair

Naim Preniqi

Proceedings Editor

Edmond Hajrizi

ISBN

978-9951-437-54-7

Location

Durres, Albania

Start Date

27-10-2017 1:00 PM

End Date

27-10-2017 2:30 PM

DOI

10.33107/ubt-ic.2017.255

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Oct 27th, 1:00 PM Oct 27th, 2:30 PM

Credit Rating of Independent Catalonia

Durres, Albania

This paper aims of estimating the sovereign credit rating, which an international credit rating agency might grant to an independent Catalonia. For the international markets, such a qualification is very vital to determine the role of an independent Catalonia as a potential debtor. These qualifications are essentials to establish the capacity of financial obligations of the independence of Catalonia and the conditions under which Catalonia will have access to financial sources in the international financial markets. The sovereign risk is the risk assumed by the international creditors in order to lend funds to an independent state considering the legal actions taken against the debtor. An independent Catalonia will entail different mechanisms to finance its activities and influence its growth: taxes (fiscal policy), money creation and regulation of interest rates (monetary policy), and public debt issuance (economic and financial policy). This paper evaluates political, economic, and financial state of independent Catalonia and its potential implications in relation to European Union (EU) to assess Catalonia’s sovereign risk; hence it gives independent Catalonia BB credit rating.