Skip to Content
Credit Insights

More Sovereign Bailouts to Come?

Without additional structural reform among troubled governmental entities, we expect only a brief respite before the next crisis.

Mentioned: , , , , , , , , ,

The Morningstar Corporate Credit Index widened 4 basis points to +154 last week. Financials led the index wider with the combination of sovereign credit fears and the Fed's announcement that it is going to conduct another stress test.

On the sovereign credit side, it looks as if we were a little too early last week with our call that Ireland would be bailed out in the near term after the country's credit spreads went ballistic. However, after protesting for the past two weeks that it would not require a bailout, the Irish government has relented and begun to negotiate the form and size of a financing package with the European Central Bank and International Monetary Fund. The Irish government has taken a hard line in its negotiation posture in order to keep as much sovereign control over its finances as possible, especially its ability to keep corporate tax rates lower than the rest those in the eurozone.

David Sekera does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.