Thomson Reuters bolsters credit risk monitoring tools

Thomson Reuters has beefed up its credit risk capabilities by adding StarMine Credit Default models to its DataScope suite in a move that brings together on one platform reference data, core ratings agency data, pricing and analytics. The models provide data services that enable automated and continuous monitoring and review processes to improve a company’s ability to predict credit events as early as possible.

Regulations such as the Basel accords and Dodd-Frank outline how companies should assess their credit risk exposure, underscoring the need for greater focus on risk management to meet compliance requirements.

The coverage for the models does not specifically include structured products, however clients can use these ratings in combination with the US company’s entity/issuer data to gain an insight into the default probability of the issuer, said Kate Toumazi (pictured)i, global head of risk data services at Thomson Reuters.

“Whether we look at the sell-side or the buy-side, one thing is clear: the need for firms to manage their credit risk has become a top agenda action item,” said Toumazi. “This increased focus has led firms to improve their credit risk capabilities, requiring accurate, timely and independent data.”

Thomson Reuters’ credit risk capabilities provide access to 388 different credit agency ratings alongside the proprietary credit models from StarMine, for a more holistic credit risk picture. The credit risk capabilities also include entity hierarchy information, including country risk data to provide a granular assessment of exposure to risk, fundamentals content allowing clients to calculate key ratios, as well as news sentiment scoring to facilitate automation of alerts to news that may have a credit impact.

“Our credit default models provide clients with the ability to evaluate the probability that a company will go bankrupt or default on its debt obligations by looking at a variety of data sources – from equity markets, financial analysis and intelligent language analysis of textual documents – offering greater insight to clients on the potential credit risk exposures in their portfolios,” said Toumazi.

In addition, users can access key reference data, legal entity indicators (LEIs), cross-referenced entity codes, as well as evaluated pricing of 2.5m securities with full transparency into methodologies and comprehensive credit default swaps (CDS) pricing.

Thomson Reuters has also launched a new app on its desktop Eikon that uses unique data visualisations to help foreign exchnage traders pinpoint value in currency markets across multiple value metrics and multiple currency pairs in real time.

The Eikon currency value tracker allows the isolation the currency pairs that may offer better opportunities to execute trading strategies. For hedging, they can also determine which structures are potentially more cost effective given the shapes of interest rate and volatility curves.

Traders can track spot, implied volatility, realised volatility, risk reversal skew, static carry, annualized net carry, spot price return, total return and various ratios. They can also evaluate historical data via heat maps, performance rankings and scatter plots in order to identify apparent inconsistencies in market pricing.