06/02/2014
Scope finalises bank ratings methodology
P { margin-bottom: 0.08in; } At a time when it is planning to publish its first ratings of European banks in the very near future, the financial ratings agency Scope on 5 February announced that it had finalised its methodology for rating banks, taking into account comments received during the unveiling of the project last September. Scope points out that its methodology increases the weight of ratings of resolution and recovery regimes, including bail-in scenarios. The agency also states that the government support provided to banks in difficulty should be much more “improbable” than before and during the crisis, with the possible exception of semi-public institutions or banks which have a well-defined public mission. In other words, the agency continues, extra points in the ratings related to public support should become the exception. Scope points out, however, that it sees no valid reason to accept the dogma that there is automatically a correlation between ratings of banks and sovereign ratings, particularly given the fact that many of the major banking groups generate revenues outside their home countries.
