In a new blog post for the UNU Centre for Policy Research, BWC Member Nicole Goldin and Daniel Cash provide insight into how the recent revision to the Fitch Ratings, one of the three major credit rating agencies, will influence the reality of sovereign debt in crisis-struck economies. The Fitch Ratings recently revised its Sovereign Rating Criteria to change the conditions that would allow temporary payment deferrals not to be automatically classified as defaults. Goldin and Cash explain the future implications of this revision, claiming that it will enable crisis-hit economies to seek liquidity relief without resulting in a negative credit event. In their view, structured flexibility is made possible through Fitch’s revision, which is key to economic relief. 

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All views expressed by members are their own and not reflective of the views of the Bretton Woods Committee.