Are we not now living in a world that has learned a bitter lesson from the euro crisis, so that bond traders are much less likely to take things like sovereign creditworthiness on trust, and are much more sceptical about breezy assurances that economies are jolly similar?Ah, the euro is just a bad comparison, he continued.
But the report pointed out that S.& P.'s review of California's creditworthiness took into account a ranking in the state Constitution that shows which debts and government programs must be paid ahead of everything else.
As a financial center, this argument goes, Britain cannot take chances with its sovereign creditworthiness the way America, as issuer of the world's reserve currency, can.
But one study, published by the Institute of Government & Public Affairs and based on an analysis of lending in Chicago, found that even after adjusting the data to take into account factors like creditworthiness, gender has a dramatic impact on both access to loans and the size of the credit line a bank will grant to a small business owner.
That said, tax liens no longer impact your credit score, which means that this key indicator of your creditworthiness won't take a hit if you're in tax trouble.
The European Commission has stepped up regulation of ratings agencies while also requiring banks and bond funds to take more responsibility for analyzing the creditworthiness of the governments and companies they invest in.
If deposits are insured, there is little incentive for a bank's customer to assess its creditworthiness and every incentive to take the highest rate on offer.
The fundamental reason for all of this is creditworthiness, and banks' reluctance to take a risk on a consumer without a track record of repayments, whether this is because they have had a poor credit record, have had periods of unemployment, or have simply moved around a lot, perhaps through no choice of their own.
They also got a boost from superior creditworthiness, which allowed them to take advantage of record low interest rates in recent years.
Default swaps, however, pinpoint credit risk.In theory, traders could take a negative view about a company's creditworthiness simply by buying a low-risk government bond and selling a corporate bond short against it.
