Whitepapers

Credit Correlations: Avoiding Unnecessary Risks

With default risks expected to rise in 2023, correlations between those risks are increasingly important for credit portfolio management. Exposures to different sectors – that normally diversify the portfolio – may show a simultaneous increase in risk during difficult economic conditions. This paper shows how Consensus credit data can be used to estimate credit correlations between regions, countries, industries, and sectors.

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October 26, 2022

Q3 2022 Credit Review: Inflation and Credit Risk: Close to Boiling Point

Inflation dominated Q3 financial news, and the resulting short rate squeeze is biting while credit volatility is rising and the COVID recovery is running out of steam. Risk indicators are high in the UK, and oil and gas price volatility has brought havoc to Europe. In North America, weaker credit trends are appearing in several sectors. Believe it or not, there are some bright spots amidst this turmoil. This whitepaper elaborates on some of these trends and shows where credit could be headed next.

July 27, 2022

Q2 2022 Quarterly Review: Credit at a Turning Point?

This whitepaper from Credit Benchmark illustrates the global credit trends in the second quarter of 2022. Widening credit spreads show a major shift to a “risk-off” mindset, as supply shocks and rate hikes show no sign of abating. Corporate default rates are likely to spike, and across sectors correlations between default risk are changing. This whitepaper tracks these shifts across many otherwise unrated countries/sectors, as well as illustrating other global trends in Q2 2022.

July 5, 2022

Credit Consensus Ratings and Risk Sharing Portfolios

Risk sharing transactions are a rapidly growing asset class, and have provided attractive returns over the past decade. As corporate credit becomes more unstable, emerging risks – and opportunities – highlight the need for comprehensive credit data for accurate transaction pricing. This paper details how Credit Consensus Ratings and Aggregates provide a detailed map of the credit market risk-reward landscape, including possible anomalies.

June 14, 2022

Something Better Change: Securities Lending Indemnification is Unsustainable in Its Current Form

In this paper Mark Faulkner reflects on the securities finance industry from a personal perspective and explores some of the challenges associated with Securities Lending Indemnification. The paper aims to explain the confluence of events behind these problems, assess their impact upon the market structure and make some suggestions to help mitigate the issues moving forward.

April 27, 2022

Q1 2022 Quarterly Review: COVID Recovery, Inflation and Ukraine Invasion

The latest whitepaper from Credit Benchmark illustrates the global credit trends in the first quarter of 2022. With global growth rebounding strongly at the start of 2022, consensus credit trends mirrored this recovery across a broad range of sectors. But as inflation grows and interest rates look likely to jump, will heavily indebted companies drive credit defaults higher?

January 26, 2022

Another COVID Year: Credit Trends in 2021

2021 was another year dominated by COVID, but will hopefully mark the beginning of the end for the pandemic. This report shows the key credit trends that emerged in 2021 and examines which geographies, industries and sectors proved resilient to the widespread deterioration brought about by COVID in 2020 – and which have a more difficult road ahead.

December 7, 2021

Global Insurance in an Era of Heightened Risk

After two tumultuous years, the global insurance market has proven its resilience, but challenges of the “new normal” are increasing. A new whitepaper examines the state of global insurance in an era of heightened risk, focusing on regional and sector trends alongside single company examples.

July 8, 2021

Trade Credit Risk and Supply Chains: The Post-Pandemic Landscape

Supply chains and trade credit are now critical in a post-COVID world. With disruption the new status quo, trade volumes are likely to fluctuate in the coming months. Though technology is helping to create more flexible supply chains. there is a long way to go to repair the damage from COVID. It is more important than ever for businesses to understand the end-to-end credit risk of their supply chains. This whitepaper demonstrates how credit consensus ratings provide part of the solution.

April 28, 2021

Navigating the Uncharted Waters of Post-COVID Trade Credit Risk

Global supply chains were showing signs of strain pre-COVID and now that the world economy is in the process of a full-scale restructuring, the credit implications are wide-ranging and long-term. This whitepaper details some factors reshaping supply chains and presents single company case studies using a combination of Bloomberg supply chain data and Credit Consensus Ratings (“CCRs”).

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Credit Benchmark brings together internal credit risk views from over 40 leading global financial institutions. The contributions are anonymized, aggregated, and published in the form of consensus ratings and aggregate analytics to provide an independent, real-world perspective of credit risk. Risk and investment professionals at banks, insurance companies, asset managers and other financial firms use the data for insights into the unrated, monitoring and alerting within their portfolios, benchmarking, assessing and analyzing trends, and fulfilling regulatory requirements and capital.

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