Aston University financial regulation expert suggests new way to cure poor countries’ credit crisis in new book

Aston University financial regulation expert suggests new way to cure poor countries’ credit crisis in new book

01/11/2022 Aston University
Publication title: Sovereign Debt Sustainability: Multilateral Debt Treatment and the Credit Rating Impasse.
Author: Dr Daniel Cash
Publication type: Book (Paperback)

  • New approach to help ease poor countries’ debt burden
  • Many face having national credit rating downgraded
  • Aston University expert coins the term the ‘credit rating impasse’ in new book.
1 November 2022 | Birmingham, UK

An Aston University financial regulation expert has suggested a new approach to help ease poor countries’ debt burden.

Currently many poorer countries face having their credit rating downgraded if they ask private investors for loans.

Dr Daniel Cash, senior lecturer in law and founder of the Credit Rating Research Initiative, has suggested that a temporary change to the way ratings are decided could help these countries avoid a damaging credit rating, which would prevent them borrowing money in the future.

His theory is explored in his new book Sovereign Debt Sustainability: Multilateral Debt Treatment and the Credit Rating Impasse.
The study details the history of multilateral debt treatment in Africa, whilst also looking at the impact of the pandemic.

When vulnerable countries try to negotiate new lending terms with their lenders their credit rating is immediately downgraded, in some cases they could be labelled as in default - failing to repay a loan. Dr Cash calls this situation the ‘credit rating impasse’.

To avoid this happening, he argues that other factors should be temporarily taken into account, making it easier for them to borrow money in the future to spend on improvements such as healthcare or infrastructure.

The UN has identified 54 developing economies with severe debt problems. While accounting for little more than 3% of the global economy, they represent 18% of the world’s population, and more than 50% of people living in extreme poverty.

The book sets out a new framework which could be used to overlie the existing credit rating system.

The book suggests considering factors such as ESG (Environmental, Social and Governance) – which indicates a country’s impact on society, the environment, and how transparent and accountable it is. Taking ESG and sustainability factors into account indicates if a nation has the potential to grow while benefiting the environment and communities.

Dr Cash said: “The credit rating impasse is a systemic problem, and a cure is needed to prevent the bankruptcy of countries around the world.
“Lower-income states are being forced to prioritise debt payments over public spending on healthcare or access to food.

“Instead, they should be offered help to enable borrowing to make vital improvements.”

The book is free to read via Open Access Book and was funded by the Open Society Foundations (OSF).
Attached files
  • Dr Daniel Cash
01/11/2022 Aston University
Regions: Europe, United Kingdom
Keywords: Business, Financial services, Government, Universities & research, Humanities, Policy - Humanities, Society, Policy - society


For well over a decade, in my capacity as a researcher, broadcaster, and producer, I have relied heavily on Alphagalileo.
All of my work trips have been planned around stories that I've found on this site.
The under embargo section allows us to plan ahead and the news releases enable us to find key experts.
Going through the tailored daily updates is the best way to start the day. It's such a critical service for me and many of my colleagues.
Koula Bouloukos, Senior manager, Editorial & Production Underknown
We have used AlphaGalileo since its foundation but frankly we need it more than ever now to ensure our research news is heard across Europe, Asia and North America. As one of the UK’s leading research universities we want to continue to work with other outstanding researchers in Europe. AlphaGalileo helps us to continue to bring our research story to them and the rest of the world.
Peter Dunn, Director of Press and Media Relations at the University of Warwick
AlphaGalileo has helped us more than double our reach at SciDev.Net. The service has enabled our journalists around the world to reach the mainstream media with articles about the impact of science on people in low- and middle-income countries, leading to big increases in the number of SciDev.Net articles that have been republished.
Ben Deighton, SciDevNet

We Work Closely With...

  • BBC
  • The Times
  • National Geographic
  • The University of Edinburgh
  • University of Cambridge
Copyright 2022 by AlphaGalileo Terms Of Use Privacy Statement