Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
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".

Advertisement
Advertisement

“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

 

Latest News

The major bank has lowered its interest rate floor for mortgage serviceability assessments, becoming the third major bank to amend its polic...

A big four bank has announced the appointment of a new chief executive officer. ...

Digital neo-lender 86 400 has been granted a full authorised deposit-taking institution licence by APRA and expects to launch its mortgage ...

FROM THE WEB
podcast

LATEST PODCAST: A shift in serviceability requirements

Do you think the banking royal commission recommendations could negatively impact competition in the mortgage market?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.