broad areas of political risk: currency inconvertibility
Specific risks identified by respondent firms are related primarily to monetary factors such as high inflation rates, currency devaluation, and currency inconvertibility
. These concerns exist for Mexico as well as for the rest of Latin America.
When exporting to overseas markets where credit and financial information often is not as readily available as it is in the United States and business and accounting practices differ, credit managers face the risks of currency inconvertibility
, economic and political instability and adverse government actions in addition to customer insolvency.
The products are created to help countries attract more investments and to promote domestic trade by providing insurance that mitigates against sovereign risks and specifically, currency inconvertibility
and exchange transfer, expropriation, trade embargoes, non-honouring of contracts and payment default risks among others.
Combine this with the possibility of changes in political regimes, political violence (think Arab Spring, Orange Revolution, Occupy Wall Street), government interference, expropriation, transfer risk or currency inconvertibility
, and international expansion becomes downright treacherous.
private investment in less developed countries by reducing risks, especially political risks (including currency inconvertibility
, expropriation, political violence, and terrorism), for U.S.
With cross-border M&As becoming more common, companies involved with transactions in emerging markets--and their financiers--face risks such as the expropriation of assets, currency inconvertibility
and acts of violence.
International policies generally cover losses due to political instability, currency inconvertibility
, embargoes, acts of war and natural disasters.
: Protects investors if local currency cannot be converted into hard currency of if investors are prevented from transferring funds from the host country.
The risks of expropriation, currency inconvertibility
; political violence and a host of related noncommercial risks loom large.
investors against expropriation or currency inconvertibility
. The U.S.