Significance of Controllable and Uncontrollable Drivers in Credit Defaults

Posted: 12 Jun 2018

See all articles by John R. Evans

John R. Evans

Centre for Analysis of Complex Financial Systems

Date Written: May 24, 2018

Abstract

The world economy has been shown to be a complex adaptive system with the consequence that companies within the global economy are constantly needing to react to influences from the activities of other companies with which they are interconnected and external influences. This paper uses a methodology developed for complex adaptive systems to analyse the characteristics of multiple credit default events in the US, Europe, and Asia over the 10 years 1990-1999 to establish the significance of factors driving credit defaults. The analysis indicates that factors controllable by companies are more significant in the US and Europe than uncontrollable events, but the reverse occurs in Asia.

Keywords: credit risk, credit risk drivers, cladistics analysis, complex systems

JEL Classification: G17, G21, G24, G32

Suggested Citation

Evans, John R., Significance of Controllable and Uncontrollable Drivers in Credit Defaults (May 24, 2018). Available at SSRN: https://ssrn.com/abstract=3184668

John R. Evans (Contact Author)

Centre for Analysis of Complex Financial Systems ( email )

PO Box 363
Summer Hill, 2130
Australia

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