We support our clients in meeting their capital preservation objectives by providing impartial and proven creditworthiness advice. Our approach to credit risk is comprehensive and dynamic. It represents the here and now, and has never simply relied upon following what the credit rating agencies say.
Arlingclose reluctance to rely on credit ratings as the sole indicator of credit risk has helped our clients avoid the problems associated with failed banks. Regulation associated with investing in banks has changed dramatically since the global financial crisis and we continue to keep our advice at the forefront of developments reflecting the fundamental shift in risk this has brought about for our clients.
We undertake full and comprehensive assessments of a wide range of credit factors and provide real-time monitoring and analysis of appropriate indicators. We have licence agreements in place with the primary rating agencies to distribute ratings but our bespoke service is much more than a simplistic information alert system. We form views and issue specific, timely advice to each client. Our creditworthiness service gives our clients real value, rather than just offering them a list of institutions meeting an ‘off the shelf’ rating criteria.
Additionally Arlingclose assessment of indicators including macroeconomic data, money market, fixed income and derivative market leading indicators and financial results, we also undertake extensive research on the implications of the risk of unsecured deposits being ‘bailed-in’ for any given level of losses incurred by the banks that are a feature of our investment advice. This includes sophisticated proprietary analysis of counterparty balance sheets and provides a key credit risk indicator that is tailored to our clients. Crucially, we also apply a subjective overlay to all our advice – if it does not look or feel right, or if there is something that cannot be explained satisfactorily then we will adopt a prudent approach.
If an element presents a warning sign then exposure (or potential exposure) is withdrawn, not simply reduced. We will not hesitate to recommend the suspension of an institution, regardless of its credit rating - after all, it’s our role to produce a list of the best available institutions in which to invest public money set against a capital preservation objective.
Although opinion on financial institutions remains a major part of our creditworthiness service, our advice goes beyond this and we provide views on other counterparties such as sovereigns, sub-sovereign agencies, registered providers of social housing, corporates and local authorities. It is also not limited to counterparty advice as we carry out in-depth assessment of individual investments such as covered bonds.