Beyond the big three: How banking consensus is reshaping credit risk assessment - Trade Treasury Payments

When 90% of your counterparties have no credit rating, risk management often relies on intangibles like reputation and gut instinct. Now, a collective of global banks is sharing the credit intelligence that could transform how treasurers assess everyone from new customers and emerging market suppliers to deposit-taking institutions.

The phrase ‘too big to fail’ has become something of a running joke in treasury circles. From Barings and Lehman’s through to the more recent collapses of Credit Suisse and SVB, history has a nasty habit of reminding us that no counterparty is invincible.

Despite these recurring lessons, corporate treasurers have traditionally been constrained by limited options when assessing credit risk across their operations. The established rating agencies – S&P, Moody’s, and Fitch – provide invaluable guidance, but their coverage is necessarily selective and their pace is deliberately measured. 

For treasurers managing entire ecosystems of banks, suppliers, customers, and business partners, these limitations can leave significant blind spots across the credit landscape.

Collective intelligence

This is where Credit Benchmark enters the picture. Founded in 2012, the firm has spent over a decade building what might be the most comprehensive real-time credit database in existence. 

Their approach is simple: rather than employing armies of analysts to form independent credit opinions, Credit Benchmark aggregates the assessments already being made by the institutions that arguably know credit risk best – the banks themselves.

“We collect data from banks large, including GSIB banks around the world,” explains David Carruthers, Credit Benchmark’s Research Adviser. “These generally are banks that have had to satisfy a regulator that the way they model credit risk is on point.”

The regulatory requirement is crucial here, since it means banks aren’t simply offering opinions, they’re making assessments that their own capital adequacy depends upon, overseen by regulators who demand rigorous back-testing and validation. It’s what Carruthers calls “the skin in the game view of risk.”

And the numbers are impressive, with data from more than 40 major banks worldwide, covering 115,000 entities across 160 countries. This universe spans corporates, financials, funds, and sovereign entities – essentially the full spectrum of counterparties that treasurers encounter in their daily operations. 

Crucially, according to Carruthers, more than 90% of these entities receive no coverage from traditional rating agencies. That means treasurers get visibility into counterparty risk across areas that have traditionally been opaque: suppliers in emerging markets, private equity-backed customers, regional banks with whom deposits or hedging relationships exist, and holding companies or SPVs that might otherwise slip through the cracks. 

This is particularly valuable for treasurers managing credit exposure across the supply chain and receivables. “If you’re offering supplier finance, or giving trade credit to a major customer, you want more than just financial statements or brand recognition,” says Carruthers. “You want to know how actual lenders are viewing the risk.”

It’s also an early-warning system. Unlike traditional agencies, which may take months or years to adjust their views, Credit Benchmark shows sentiment shifts in near real time. Banks update their models quarterly or monthly; the consensus reflects these changes weekly. If multiple banks flag deteriorating credit quality, the signal becomes visible.

Consensus adds extra value

Observing where banking consensus diverges from traditional ratings also provides intelligence where none previously existed. Take the example of a UK-based deposit-taking institution whose bank-sourced consensus rating slipped from A- to BB+ across 2024 (well below most corporate counterparty thresholds) while the official rating remained unmoved.

In another case, Credit Benchmark data showed “radio silence” for a telecoms company months before it filed for bankruptcy. As banks stopped submitting credit estimates altogether, the company dropped out of the platform’s coverage – often a sign that lending relationships have ceased. “It doesn’t always mean default is imminent,” says Carruthers, “but the absence of data from lenders is itself a data point.”

The platform also tracks subtle shifts below the rating threshold. Opinion change indicators allow users to see if banks are adjusting their views upward or downward, even if the entity hasn’t crossed into a new rating band. For treasurers operating with tight thresholds or internal limits, these micro-movements can inform timely decisions around cash placement, trade credit, or hedging exposure.

Portfolio-level risk management

Beyond a database, Credit Benchmark also acts as a working tool for treasury teams. Portfolios of counterparties can be uploaded directly, with users receiving automated alerts when consensus ratings change or new coverage becomes available.

As Davina Mutto, Client Services Associate, Credit Benchmark, explains: “You can screen across any criteria: region, rating band, sector, even by ultimate parent. And for any entity, you can view not just the average consensus, but how widely the individual estimates diverge. That’s a useful indicator of confidence or risk.”

Treasurers can also benchmark entities against similar peers, track changes over time, and export tailored reports for inclusion in board packs. “You’re not just relying on brand names anymore,” comments Mutto. “You’ve got structured visibility into how those names are perceived by lenders.”

Regulator-recognised

The platform’s credibility received a significant boost during the COVID-19 crisis when the Bank of England specifically requested Credit Benchmark’s data on UK corporates and financials to support their emergency financing facilities. “It was a big vote of confidence that the Bank of England clearly felt that they could base their own lending decisions on the views of the banks that they regulated,” Carruthers reflects.

Bloomberg has also integrated Credit Benchmark data to provide issuer ratings for the 150,000 most traded corporate bonds globally. While TreasurySpring has begun incorporating the data directly into their client reporting, recognising that modern treasury operations require visibility across a much broader universe than traditional cash management tools typically provide.

Nigel Owen, Head of Corporate Origination, TreasurySpring, comments: “Credit risk, like any other risk, should never be feared, but needs to be understood and managed as suits a treasurer’s risk appetite and adheres to their credit policy. That is why we believe offering access to Credit Benchmark’s insights via our Credit Report gives treasurers an additional tool to ensure they are achieving the best risk-adjusted returns.”

Real-world visibility

For treasurers, the implications are clear. Traditional rating agencies still play a critical role, especially for listed corporates and structured products. But the realities of modern treasury – multi-market exposure, private counterparties and dynamic relationships – require a broader view.

Tools like Credit Benchmark represent part of a broader evolution in financial risk management, where technology enables the aggregation of previously siloed expertise. For treasurers operating in an environment of persistent uncertainty (and where central banks routinely cite ‘increased volatility’ as a factor in their decision-making) having access to multiple perspectives on credit quality across their entire business ecosystem is becoming essential.

Of course, the traditional rating agency model remains valuable, particularly for its independence and standardised methodologies. But at a time when the next ‘impossible’ failure could come from anywhere, treasurers need all the intelligence they can get.

This article is based on a recent webinar hosted by Nigel Owen, Head of Corporate Origination, TreasurySpring. Watch the replay to find out more.