Legislative risk

Legislative risk

The risk that new or changed legislation will have a large positive or negative effect on an investment.

Legislative Risk

The risk of loss due to a change in law in a particular jurisdiction. In general, legislative risk is the same is political risk, though the latter encompasses situations like coups and terrorism while legislative risk refers to changes in law according to due process. An (extreme) example of legislative risk is the possibility that the holder of a real estate investment trust will suffer a loss if the government passes a law that nationalizes all land in the country. More commonly, legislative risk deals with changes such as requirements to provide more benefits to employees or free trade agreements that make an industry less competitive against its foreign counterpart.
References in periodicals archive ?
Because epistemic deficiency is similarly a problem with respect to legislative risk assessments in the criminal law, the theoretical defenses of abstract endangerment statutes require far more support for their implicit claims.
Proposed state legislation for mandatory firearms insurance is another example of legislative risk.
Legislative risk occurs because of potential changes in current law that may erode the value of current and past tax positions.
In my opinion, the two greatest risks to municipal-bond investing are what they always have been: interest rate risk and legislative risk.
Ratings are constrained by legislative risk inherent in the industry, uncertain term funding availability for the private education loan product, and limited revenue diversity, given its concentration in educational products and services.
Declines in investment performance, a key man event, and/or legislative risk which negatively impact the company's ability to raise FAUM and generate fees, meaningful increases in leverage, and/or impairment of the liquidity profile could result in negative rating action.
Declines in investment performance, a key man event, and/or legislative risk which negatively impacts the company's ability to raise FAUM and generate fees, meaningful increases in leverage, and/or impairment of the liquidity profile could result in negative rating action.
While legislative risk has always been a key rating factor for SLM, the proposal to essentially eliminate FFELP is not incorporated in the current ratings, as the announcement follows a concerted effort to support FFELP lenders in recent months to ensure uninterrupted access to funding for students.
Ratings are constrained by legislative risk inherent in the industry, weakening performance in the private education loan portfolio, and reduced funding flexibility following dislocations in the capital markets and the terminated merger transaction.
Fitch's expected ratings are based on SLM's continued dominant position in the acquisition and servicing of government-guaranteed student loans, core earnings consistency, low consolidated credit risk, and strong liquidity profile; offset by heightened legislative risk in the industry, increased credit losses in the private education loan product, increased consolidated leverage, reduced funding flexibility, negative tangible net worth, and moderate cash flow coverage.
The principal risks now included potential exposure to movements in commodity prices, legislative risks and the response of Sembcorp's customers on the Wilton site to the recession.
Among these factors are changes in overall economic conditions, changes in demand for our products, changes in the demand for, or price of, oil, risk of terrorism, war, geopolitical or other exogenous shocks to the airline sector, risks of increased competition, manufacturing and product development risks, loss of key customers, changes in government regulations, foreign and domestic political and legislative risks, risks associated with foreign operations and foreign currency exchange rates and controls, strikes,embargoes, weather-related risks and other risks and uncertainties.
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