• Sovereign Ratings

Brickwork Finance Academy offers a new course in Sovereign Ratings

Brickwork Finance Academy (BFA), Bengaluru introduces a course in Sovereign Ratings. The first of its kind in the country, this course provides in-depth knowledge about country risk assessment and analyzing financial crises. The course is available for the first 25 selected students only.

Brickwork Finance Academy believes that doing business in the new world will require good understanding of country finances, foreign exchange markets and international competitiveness in this era globalization. BFA has hence decided to incorporate a course on Sovereign Ratings in its flagship PGP (Postgraduate Program) in Finance. The course is designed to equip participants with knowledge and skills required to assess a country’s current economic performance and outlook. The curriculum focuses on areas of macroeconomics, country’s growth engine, domestic savings, foreign investment, current deficit, domestic and foreign debt, monetary policy, current and capital account convertibility, currency management etc. The History of Sovereign Defaults will be presented as possible lessons to draw upon and analyze if the present resembles any past crises. Students will be exposed to public finance, federal and state government budgets, international and domestic financial markets, foreign exchange and monetary policies, and more.

While the world experienced the World War II in 1942, the fall of supremacy of UK thereafter, break down of dollar-gold link in 1971, structural oil price rise and high inflation in 1970, yet the world saw many positive events. Rapid industrialization of the west, rebuilding and growth of Germany and Japan, easing of trade barriers, globalization, breakdown of Berlin Wall, and consequent unification of Europe and the birth of Euro as the second most powerful currency in the world were some of them. The period from 1993 to 2007 was a relatively peaceful, high growth period that also saw the emergence of BRIC nations.

The period ended in 2008, with devastating mortgage crises, where the politicians offered their constituency better standard of living in housing boom equity, bankers pushed mortgage loans on subprime borrowers, investment bankers packaged the securities backed by insurance companies underwrote credit default swaps and the rating agencies asked fewer questions. The year 2008 also saw the collapse of Lehman Brothers, uncertain markets, collapse of housing market and a deflationary developed world. While the US was the most affected, the Europeans were relatively better off.

The world witnessed more recently, the weaknesses of Europe, emergence of PIGS – Portugal, Ireland, Greece and Spain and threat of default now reaching Italy and a bit remotely even AAA rated France. The southern European countries have been relatively lax in managing their fiscal policies, running huge budget deficits, not controlling pensions, healthcare and other entitlements, and unbridled real estate expansion backed with cheap foreign money borrowed in a strong Euro currency. With even German treasury auctions only partially successful, most countries in Europe face very high borrowing costs and an uncertain future. Unless Germany and France show statesmanship and other countries display honesty in their fiscal affairs, the Euro may become a glory of the past.

Simultaneously the BRIC nations have been doing well. China has emerged as one of the world’s strongest economy maintaining over 9% growth rate. Brazil has emerged out of Least Developed country debt crises and has an appreciating currency. Russia has been growing but has not been able to diversify the industry and is over dependent on just oil and related industry. India has been doing well with high growth rates in the last few years. India is also showing problems of fiscal deficit at the centre and the states, a weakening currency due to global factors and uncertainties in growth in both domestic and foreign markets.

The US subprime crisis and the eventual collapse of Lehman Brothers, the financial weakness of some of the European countries, uncertain outlook of some of the more stable countries like France and Germany, and the emergence and growth of BRIC countries prompts one to think more in terms of a country’s finances.

Brickwork Finance Academy believes that every student of finance must understand the sovereign ratings, national and international macro factors for proper analysis. While the standard company analysis focuses on industry risk, business risk, financial risk and management risk, BFA believes that country risk will form the most important component of the analysis going further. Hence, the course on Sovereign Ratings.

Applicants are encouraged to visit www.bfa-india.org for more information and online application. Admission to the first batch is limited to the first 25 selected students only. Classes are offered only in Bengaluru and on Saturdays.

About BFA: Brickwork Finance Academy is a non-profit organization committed to create intellectual capital in the field of finance. BFA offers a 9-month Post Graduate Program in Finance for working people aspiring for a career in finance. Students have to pass 19 courses in finance and complete a project. Classes are held on Saturdays. The program offers hands-on experience in financial markets and applications using practical case studies and various third party databases. In addition, it offers internship / placement opportunities at two world-class organizations – Brickwork India and Brickwork Ratings. Students will have the opportunity of placement as analyst in investment banks, mutual funds, insurance firms, loan officer in commercial banks, NBFC, as well opportunities in venture funds, private equity, stock exchanges etc.

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