The risk of default by these countries is much less now than it was three years ago.
They are allowed by law to charge for the higher risk of default.
Most are safe, in the sense that there is no default risk.
Hence the bank will want to keep the risk of default low.
Would you sell a mortgage to someone who had a high risk of default?
It is reinforced further by the fact that they have a low default risk.
There are other ways to eliminate or reduce the risk of default.
Money market funds, which are designed to maintain a price of $1 a share, carry little default risk, however.
A key indicator of a particular security's default risk is its credit rating.
Credit scores are designed to measure the risk of default by taking into account various factors in a person's financial history.