Abstract:

The credit default swap spreads of a country are affected positively or negatively by economic and financial headwinds in addition to political, military and social events which have an impact on investors’ risk perception. One of the events, which affect the investors’ risk perception, is also global events and consequent global risks. Global risk is defined as the changes in the returns of the financial instruments which will be caused by international developments. In this context, this study aims to analyse the effect of good and bad news related to Iraq Iran and Syria on Turkey’s 5-year term CDS premiums. In this study that used event study methodology, the news related to Iraq Iran and Syria and Turkey’s 5-year term CDS premiums were used as data. As a result of this study, it was found that only the good and bad news related to Iran had an effect on Turkey’s CDS premiums, in other words, Turkey’s sovereign risk. It is thought that this study contributes to the related literature by revealing findings regarding its subject and purpose

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