Risk measures for each of the main categories of risk as discussed above should be in place. For economic risk the traditional measures of fiscal and monetary policy is required, such as the size and composition of government expenditure, tax policies, the debt situation of the government and financial maturity. The degree of the openness of the economy and other institutional factors may also affect the creation of wealth. Transfer risk measures include the ratio of debt service payments to exports or to exports plus net foreign direct investment, foreign currency reserves and measures related to the current account status of a country. Many of the measures used to identify transfer risk also identify exchange risk, since a sharp depreciation of the currency can reduce some of the imbalances that lead to increased transfer risk.
Geographic position provides the simplest measure of risk.
Trading partners, international trading alliances, size of the market and the distance from economically or politically important countries or regions can also, help to define geographical risk. Sovereign risk measures of the ability of a government to pay are similar to transfer risk measures. Measures of willingness to pay require a record of the repayment performance of a country. On the other hand very few measures exist to help assess political risk. Measurement approaches range from classification methods such as the type of political structure or the diversity of ethnic structure, to surveys by political experts who rank multiple socio-political factors according to certain grades or scales.