In this update we present evidence that Fathom’s Financial Vulnerability Indicator is a more useful signal on which to base country risk decisions than the widely used sovereign Credit Default Swaps (CDS). We demonstrate that the Sovereign FVI in particular is a more stable and informative indicator than CDS spreads, thanks to its blend of data from both slow-moving macroeconomic variables (in the imbalances driver) and faster-moving ones (in the reversals driver). In effect, the FVI can be thought of…
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