ABSTRACT
The main role and responsibility of credit rating agencies resides in the accurate assessment of sovereign solvency that has developed progressively since the 1800, as described in Chapter 5. To fulfil their role and responsibility, agencies use specific approaches that are based on economic, institutional, fiscal variables and measures of risk, but also use some qualitative factors that may influence the ability and willingness of a given sovereign to honour its financial obligations. Overall agencies seem to use comparable approaches for sovereign creditworthiness assessment. These are measures used by sovereign lenders and investors, to gauge the likelihood of risks they may be facing when lending money to or investing in the securities of a particular sovereign issuer. Given, however, the use made of ratings, their accuracy is a fundamental issue.
