Romania ranks eighth in world top ten countries at risk of bankruptcy

With a 25.5 percent probability of payment cessation, Romania ranks 8th in the world’s top ten countries with the highest risk of bankruptcy in Q2 2010, according to the indicators calculated by the financial market monitoring company Credit Market Analysis (CMA).

The Credit Default Swap for Romania’s debts stood at 412.8 points, Romania thus ranking third in Europe. The Credit Default Swap represents the cost of insurance against a payment cessation for the government bonds issued by Romania and is a financial instrument used by investors to protect against the financial default risk on the part of a creditor.

The investors deem Romania riskier than Latvia and Bulgaria, which are also present in the top 10. In Q2 2010, Romania was a new entry in the top ten countries with the highest risk of entering into payment default.
In emerging Europe, according to the CMA data, Romania, Hungary and Bulgaria registered the poorest results over April-June 2010, with the costs associated to the debts marking a rise by 105 percent in Romania’s case, by 95 percent in Hungary’s case and by 93 percent in Bulgaria’s case.

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