What we do

Credit Benchmark is a financial data analytics company offering access to an entirely new source of information: the consensus credit risk views of the world’s leading financial institutions

Transparent

Credit Benchmark brings together the credit risk assessments of the world’s leading financial institutions to deliver greater visibility into the credit quality of individual entities. Using an innovative approach, Credit Benchmark aggregates, anonymizes and publishes monthly consensus credit indicators on sovereigns, financial institutions, corporates and small and medium enterprises

Objective

An alternative opinion to credit rating agencies on rated entities and visibility in to the larger unrated universe. Approximately 75% of the entities we cover do not have a long-term rating from a credit rating agency

Dynamic

Credit changes continuously under review and updated monthly

Forward looking

Clear trends and early warning of changes in credit quality status

Credit Benchmark Consensus offers a unique measure of credit risk

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Credit Benchmark breaks new ground in the credit risk space, bringing together – for the first time – the anonymized views of the world’s most sophisticated financial institutions, using a contributory model proven to add value.

Credit Benchmark partners with financial institutions that follow an internal ratings-based (IRB) approach or those that participate in the Comprehensive Capital Analysis and Review (CCAR) process. The underlying inputs from contributors that make up our dataset are subject to a rigorous approval process and standards from regulatory bodies. Credit Benchmark illuminates the work undertaken by these institutions by applying a well-understood “contributed data” business model to credit risk.

We collect a specific measure of credit risk from contributors: a one-year, forward-looking Probability of Default (PD) and forward-looking senior unsecured Loss Given Default (LGD). Contributors have a strong financial incentive to ensure the accuracy of each PD and LGD, leading to a credible market view of credit risk.

The contributed risk estimates are anonymized, aggregated and mapped to the appropriate credit category on the Credit Benchmark Consensus scale. The output, the Credit Benchmark Consensus (CBC), is based on a 21-category (lower case) scale, which can be used as a benchmark for the scales published by the rating agencies.

Credit Benchmark’s coverage is already broader than the Credit Rating Agencies in several key geographies, and each new contributor further accelerates coverage, informational value and use cases. Our business model improves our clients’ ability to manage risk with insight into the universe of unrated organizations that the ‘issuer pay’ model cannot expand to cover.

Currently we publish data on a monthly basis, including historical observations going back to May 2015. Where there are at least 3 separate contributor estimates for the same entity, we calculate and publish simple average PD and LGD estimates. PD estimates can also be mapped into each contributor’s own grading scale to enhance benchmarking.

Our dataset enables Credit Analysts and risk professionals to have access to a new source of information that compliments their own research and provides peer comparisons.

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Use cases

There are a number of use cases for our dataset. Our clients are using CBCs for:

Counterparty risk

Trend credit monitoring

Portfolio tracking

Macro analysis

Defining risk appetite

Model calibration

IFRS9 / CECL

Peer analysis

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