subscribe to our newsletter
Banks under greater risk scrutiny, says Moody’s

Banks under greater risk scrutiny, says Moody’s

Credit ratings agency Moody’s has announced it has assigned counterparty risk assessments to 18 Australian banks, including the big four, as part of a move to increase oversight of banking risks globally.

The CR assessments, as they are commonly known, are part of Moody's updating its methodologies for rating banks worldwide.

Moody’s describes the CR assessments as “an opinion of the counterparty risk related to a bank's covered bonds, contractual performance obligations (servicing), derivatives (e.g., swaps), letters of credit, guarantees and liquidity facilities".

“CR Assessments are opinions of how counterparty obligations are likely to be treated if a bank fails, and are distinct from debt ratings in that they: (1) consider only the risk of default rather than expected loss; and (2) apply to counterparty obligations and contractual commitments rather than debt instruments,” Moody's said.

The measures do not affect the credit ratings assigned to each of the banks, which remain stable.

While no specific findings for each bank were disclosed, the move may help to boost market confidence in the identification of bank risks.

As well as the big four banks and non-majors, those that are to be assigned CR Assessments by Moody’s include some of Australia’s leading customer-owned banks and building societies, such as Teachers Mutual Bank, QT Mutual Bank and Newcastle Permanent Building Society.

Banks under greater risk scrutiny, says Moody’s
mortgagebusiness logo

Latest News

The major bank has conceded to the royal commission that there were a “number of errors” in an “unacceptable” loan application it ap...

The non-bank lender has announced that it has replaced its current group treasurer, Todd Lawler, with ex-QBE executive Paul Byrne. ...

A “strong launch period” has prompted a peer-to-peer lender to extend its green loans program by 18 months. ...

Promoted Stories

podcast

LATEST PODCAST: Macquarie merger, WA property tax and AMP staff haemorrhage

Do you expect access to credit to get harder this year?