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In November 2023 the European Central Bank (ECB) accepted Scope Ratings as the first European rating agency in the Eurosystem Credit Assessment Framework (ECAF). The acceptance included sovereign, corporate, financial institutions and covered bonds ratings. The application process for ABS followed a specific procedure, which has now been completed. The complete technical implementation of Scope’s ratings by the ECB is expected shortly making them eligible for monetary purposes.
Florian Schoeller, CEO of Scope Group, said: “We are delighted that all our credit ratings are accepted by the ECB. This is what the market has been waiting for – greater diversity of credit opinions which enables investors and banks to better manage risks while helping Europe’s capital markets grow.”
Guillaume Jolivet, CAO of Scope Group, said: “The ECB’s acceptance of ABS ratings by a European rating agency is concrete progress towards a fully functioning capital market union. This move creates a more diversified and competitive rating landscape, enhancing the stability and performance of European financial markets and in particular supports the European securitisation market.”
About ABS – The asset-backed securities (ABS) market covers a wide range of asset classes, including residential mortgages, loans to small and medium-sized enterprises, leasing receivables, auto and consumer finance loans and credit card receivables. Converting asset pools into marketable securities allows banks to raise liquidity, release capital for new lending and manage their risks. The European securitisation market saw over EUR 213bn in placed and retained issuance in 2023 and almost EUR 61bn in the first quarter of 2024, according to the Association for Financial Markets in Europe (AFME). Leading European politicians have called for greater efforts to broaden and deepen the securitisation market in Europe to help complete the EU’s Capital Markets Union. Most ABS classes are accepted as eligible collateral by the Eurosystem. ABS represents one of the largest asset pools used as ECB collateral.
About ECAF: ECAF is the ECB’s framework that ensures the quality of collateral used in the Eurosystem's credit operations. The primary goal is to ensure the creditworthiness of counterparties and the collateral used in Eurosystem credit operations. ECAF aims to harmonise credit assessment standards across the euro area, ensuring consistency and fairness in how collateral is assessed. With ECAF accreditation, Scope’s credit ratings can be used to fulfil credit quality requirements of marketable assets that are eligible as collateral in Eurosystem monetary policy operations. The rating also affects how much money a commercial bank can borrow using an asset as collateral. The lower the rating, the higher the so-called haircut applied by the Eurosystem. More information on the acceptance of Scope Ratings
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