Since the early 1970s, JP Morgan has advised thousands of sovereigns, government-linked corporations, financial institutions and private companies on credit ratings, including obtaining initial ratings; accelerating positive rating momentum and maintaining ratings under the threat of a possible downgrade. JP Morgan’s Sovereign Advisory group has worked with dozens of sovereigns around the globe, cooperating with authorities to manage various rating dynamics. In some cases, JP Morgan is brought into position for positive rating actions, capitalizing on positive momentum and helping to accelerate the sovereign’s movement up the rating scale. Alternatively, the team is also at times brought in at a point when governments face significant downward pressure on their ratings. In these scenarios, the goal of the advisory exercise is to prevent or limit the extent of the rating downgrade.
The Capstone team was tasked to research and provide insights into the reporting standards of public sector accounts globally. The goal is to understand the global best practices in disclosure standards of government liabilities on balance sheet and off-balance sheet. The fiscal balance sheet and contingent liabilities are key inputs that influence sovereign ratings. The findings from this project could help inform governments on improvements in fiscal transparency and accountability that could potentially unlock rating upside potential or lower interest expense.