Country Risk
Risk associated with a cross-border transaction, including but not limited to legal and political conditions.
Related terms
Contagion
The tendency of an economic crisis or sell-off to spread from one country or market to another. Exchange rates, stock prices and sovereign bond prices can all be quickly affected as capital flows away from the areas involved.
Read full definitionEmerging Markets
Economies that are developing toward advanced-market status, often offering higher growth alongside greater currency, political and liquidity risk. Trading with them frequently calls for tailored FX and payment solutions.
Read full definitionCurrency Risk
The danger of losing capital due to changes in foreign exchange prices, including the risk to a portfolio when currency markets experience strong moves.
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Account Deficit
A negative balance of trade or payments, where a country’s imports and outgoing payments exceed its exports and incoming payments.
Read full definitionAsian Central Banks
The monetary authorities of Asian countries. They have become increasingly active in major currencies as they manage growing pools of foreign currency reserves arising from trade surpluses, and their market interest can influence currency direction in the short term.
Read full definitionBank for International Settlements (BIS)
A global financial institution owned by central banks, based in Basel, Switzerland, with representative offices in Hong Kong and Mexico City. Its original members were Switzerland, Germany, Belgium, France, Britain, Italy, the United States and Japan.
Read full definitionBank of China
One of China’s four largest state-owned commercial banks. It maintains close relations with the People’s Bank of China in management, administration and cooperation across several areas.
Read full definitionBank of England (BoE)
The central bank of the United Kingdom, acting as the government’s bank and lender of last resort. Headquartered in the City of London, it issues currency and oversees monetary policy, making it the UK equivalent of the US Federal Reserve.
Read full definitionBase Rate
The interest rate a central bank, such as the Bank of England or Federal Reserve, charges to lend money to commercial banks. Adjusting the base rate helps a central bank regulate the economy by encouraging or discouraging spending as required.
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