Powered by MOMENTUM MEDIA
realestatebusiness logo

Subscribe to our newsletter

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.

Advertisement
Advertisement

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

Making news this week, Volt Bank set to exit the banking industry, APRA confirms banks treatment for home guarantees, Australian outright ho...

From Friday (1 July), 40,000 new places have become available under the federal government’s schemes to help Australians buy their own ho...

The big four banks continue to dominate the mortgage market with three reporting an increase to their home loan books over May, APRA stats r...

VIEW ALL

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

Do you think the new NSW property tax will help or hinder first home buyers?

Website Notifications

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