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Banks sanguine over “Frexit” risk

In the run-up to the Brexit referendum Credit Benchmark’s data showed the clear possibility of a “Leave” vote, with IRB banks effectively downgrading the UK Government from aa+ to aa. Despite market volatility, bank credit analysts seem far more sanguine about Marine Le Pen’s chances of winning the French presidential election and “Frexit”. The CBC for France is stable and the aggregate probability of default is falling.

No light touch regulation for insurers post-Brexit, but flexible approach to illiquid credit

Prudential Regulation Authority CEO Sam Woods says wholesale changes to insurance regulation are unlikely. However, he offers hope of greater flexibility in key areas such as the Matching Adjustment and internal models, if insurers can demonstrate credit and risk management expertise

Sony, Yahoo, Moog, Apache, and Seagate move to Investment Grade

Banks have recently moved a number of companies to investment grade (bbb- or better). Some of these moves reflect broader sector trends and others are company-specific.

UK Sovereign risk rising despite strong Gilt performance

Gilt issuance by the UK is at its lowest in a decade, and 10-year gilt spreads are at a 25-year low versus US Treasuries. But bank-sourced data shows growing concern about UK Sovereign risk.

Credit Benchmark at RiskMinds Insurance in Amsterdam this week

The Credit Benchmark team are at the RiskMinds Insurance conference at the Hotel Okura in Amsterdam this week. We will be presenting the latest data and research on Wednesday afternoon at 2:35pm in the Qualitative Risk Management: Regulation, Reporting & Governance session.

European Insurers: credit risk shows net improvement in first year of Solvency II

It has been a busy few months for European insurers, as they take stock of one full year of operation of Solvency II. Mergers and acquisitions are picking up and are expected to remain a key feature of the corporate landscape. Bank-sourced data shows that insurance company credit risk has stabilized after a slight pickup in 2016. More generally, bank-sourced credit data provides a new and robust set of benchmarks for calibrating Solvency II metrics.

Canadian Banks: credit risk at low end of S&P/TSX60 credit range

Canadian banks were largely unaffected by the last financial crisis, but a BIS report this week raised concerns about credit growth and property prices. However, compared with the credit risk of the constituents of the S&P/TSX60 index, global banks still view Canadian banks as low risk counterparts.

Current financial mergers, acquisitions and fund raisings will positively impact credit quality

Banking, Clearing, Insurance and Asset Management are seeing a wave of major mergers, acquisitions and fund raisings. This burst of corporate activity is a reflection of major changes in regulation and fees; for those that succeed, it is expected to lead to stronger balance sheets and credit quality improvements.

January Credit Data Update: Upgrades outnumber downgrades

We have published credit data for January, with 12 contributor banks now providing crowd-sourced credit views (CBC*) on more than 8,000 separate legal entities. Upgrades significantly outnumber downgrades this month.

Central Counterparty credit risks show significant variation

Outstanding derivative contracts are being progressively transferred to Central Counterparties (“CCPs”). The CCP framework is intended to minimize global (i.e. systemic) risk as well as local credit risk. Based on the credit quality of the underlying clearing members, Credit Benchmark data shows that there is significant variation in the credit quality of CCPs.