Risk institutional investor rankings 2012

Credit ratings for sovereigns and dealers are on the slide – an extra incentive to use clearing houses – but only the biggest institutions have started clearing, and half of respondents to this year’s rankings say they are not expecting to do so at all. By Joe Rennison, with research by Fiona Maurer

Counterparty credit assessment is not what it used to be. There was a time, before the eurozone debt crisis, when institutional end-users could satisfy themselves with a swift glance at a dealer’s credit rating or – for the sophisticated – the credit default swap spread. The majority of trades were collateralised anyway, so it wasn’t a big deal.

That’s less true today. The past 12 months have seen a steady slide in both bank and sovereign credit ratings – the US and France lost their AAA ratings