IOSCO Publishes Report Recommending Practices for Assessing Credit Risk at Large Intermediaries

IOSCO published a consultation report titled "Sound Practices at Large Intermediaries: Alternatives to the Use of Credit Ratings to Assess Creditworthiness." The report lists 13 sound practices for large market intermediary firms to consider when implementing their internal credit assessment policies and procedures.

To identify the sound practices that it now recommends, IOSCO conducted a study of large market intermediary firms to gain an understanding of their current practices for assessing credit risk; it did not rely on the abstract ratings of credit rating agencies. IOSCO also convened two roundtable discussions with intermediary representatives.

According to IOSCO, "identifying sound practices regarding the suitable alternatives to credit ratings for assessing credit risk should reduce the potential overreliance of large intermediaries on credit rating agencies."

Comments on the consultation report should be submitted by July 8, 2015.

See: "Sound Practices at Large Intermediaries: Alternatives to the Use of Credit Ratings to Assess Creditworthiness"; IOSCO Press Release.