Exclusive: Credit Benchmark consensus data reveals mixed bag of results
22 October 2021 UK
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Credit Benchmark’s consensus data has identified deterioration for banks but improvement in credit for most types of intermediaries, such as central counterparty (CCP) members, prime brokers, and broker dealers. The results also show improvement for asset managers and insurance companies.
The data summarises the number of entities per counterpart category with a credit consensus rating, their month-on-month changes in credit distribution, and their transitioning credit quality; the larger the ratio figure, the more deterioration.
According to Credit Benchmark, three classes of intermediaries saw more improvement than deterioration. The category with the best ratio was prime brokers at 2:1, followed by CCP members at 1.5:1 and broker dealers at 1.4:1.
Central clearing counterparts was steady with neither improvement nor deterioration at 1:1. Only custodians and sub custodians moved in the wrong direction.
The news was even better for the buy side. Credit Benchmark explains that asset managers led the pack with a ratio of 1.7:1, followed by mutual funds at 1.5:1, pension funds at 1.4:1, and insurance companies at 1.2:1. Only sovereign wealth funds saw more deterioration than improvement.
The news was more mixed for banks, with Credit Benchmark identifying some categories seeing improvement and others seeing deterioration, but the broad category of global banks was even at 1:1.
David Carruthers, head of research at Credit Benchmark, comments: “Overall improvement is always welcome, even if moves are minor. As important as banks are to the real economy, entities like clearers and custodians are the backbone of the financial system.”
In July, after several months of downgrades,Credit Benchmark consensus data showed improvement across multiple categories of financial counterparts.
The data summarises the number of entities per counterpart category with a credit consensus rating, their month-on-month changes in credit distribution, and their transitioning credit quality; the larger the ratio figure, the more deterioration.
According to Credit Benchmark, three classes of intermediaries saw more improvement than deterioration. The category with the best ratio was prime brokers at 2:1, followed by CCP members at 1.5:1 and broker dealers at 1.4:1.
Central clearing counterparts was steady with neither improvement nor deterioration at 1:1. Only custodians and sub custodians moved in the wrong direction.
The news was even better for the buy side. Credit Benchmark explains that asset managers led the pack with a ratio of 1.7:1, followed by mutual funds at 1.5:1, pension funds at 1.4:1, and insurance companies at 1.2:1. Only sovereign wealth funds saw more deterioration than improvement.
The news was more mixed for banks, with Credit Benchmark identifying some categories seeing improvement and others seeing deterioration, but the broad category of global banks was even at 1:1.
David Carruthers, head of research at Credit Benchmark, comments: “Overall improvement is always welcome, even if moves are minor. As important as banks are to the real economy, entities like clearers and custodians are the backbone of the financial system.”
In July, after several months of downgrades,Credit Benchmark consensus data showed improvement across multiple categories of financial counterparts.
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