sovereign problem

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Senior Member
Hi friends!

That's the abstract:
"This is a sovereign problem, and it's hitting everything," said Keith Springer, president of Capital Financial Advisory Services in Sacramento, California.


Just a support about the meaning of "sovereign problem" in this context.
Could I read it as "problem affecting a sovereign nation" ? Or not?

Actually I am not sure about it.

Thanks a lot in advance!
  • Matching Mole

    Senior Member
    England, English
    In finance, sovereign risk is the risk in dealing with the government of a country (as opposed to, say, a corporation). If for example, a country defaults on a debt, it may be very difficult to force them to pay it. A country is also able to change laws that might nullify an outstanding financial agreement with them, and political or economic instability may result in a government defaulting on a debt, with virtually no hope of redress.

    By saying this is a "sovereign problem", the writer means that the current crisis is not just a problem with Greece, it is affecting sovereign risks generally.
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