Credit FAQ

June 26, 2012 (LBO) – Standard and Poor’s, a rating agency has released a document answering potential investor queries following the release of a Banking Industry Country Risk Assessment. The full statement is reproduced below:

Understanding Standard & Poor’s BICRA Assessment Of Sri Lanka

Standard & Poor’s Ratings Services recently assigned Sri Lanka to its Banking Industry Country Risk Assessment (BICRA) group ‘8’. This is our first assessment of Sri Lanka’s banking industry under our BICRA methodology.

This article addresses questions investors and market participants may have about our rationale for assigning Sri Lanka to BICRA group ‘8’. We also assess what this means for banks operating in Sri Lanka.

Frequently Asked Questions

What is BICRA? What does it communicate?

The strengths and weaknesses of an economy and its banking industry are critical factors that underpin the creditworthiness of a country’s financial institutions. Under our criteria, we distill this analysis into a single measure called BICRA. The BICRA framework is designed to evaluate and compare global banking systems on a relative scale. It is not an absolute measu