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  Issue 14 | Archive Feb 2013

RMI’s Credit Research Initiative’s Coverage Expanded to 106 Economies

On 4 December 2012, RMI’s Credit Research Initiative (CRI) achieved yet another milestone by expanding its coverage from 46 to 106 economies globally. Results are provided for a total of 60,400 listed firms (including firms that are now delisted), up from 53,000. More than even before, the CRI now provides a credit benchmark for markets that other prominent credit information providers give only limited coverage to.

Regions being covered include Asia Pacific, North America, Europe, Latin America, the Middle East and Africa. Some of the newly added countries are Bahrain, Bulgaria, Croatia, Czech Republic, Egypt, Hungary, Israel, Jordan, Kazakhstan, Kuwait, Latvia, Lithuania, Macedonia, Morocco, Nigeria, Pakistan, Poland, Romania, Russia, Saudi Arabia, South Africa, Sri Lanka, Turkey, Ukraine and United Arab Emirates.

The expansion is RMI’s active response to the industry’s growing needs. “Through our dialogues with the industry and market participants, we realized there was a clear demand for expansion of coverage to fill the gaps left by other credit information providers. The extended coverage has been well received by the users and addresses their current needs,” affirmed RMI Director, Prof. Duan Jin-Chuan.

The addition of certain regions also reflects the growing importance of those economies to users and investors around the globe, while the inclusion of economies like Russia achieves RMI’s original goal of covering all the major markets.

The CRI team has worked on this expansion for the past few months. “The main challenge was the collection of comprehensive data. The team worked very hard to check the quality of the data required for both historical implementation and daily operation,” shared Gao Jun, research analyst and the CRI production team lead. Of the 38,150 firms in these economies that are active at this time, over 33,500 firms have sufficient data to release daily updated Probability of Default (PD).

“However, this experience has been quite fulfilling. The extended coverage is the testimony that an operation of this calibre can be implemented on a global scale for public use and that the RMI PD model can be used across various economies,” added Gao.

RMI, which has a public good approach to credit ratings, has provided independent credit research and greater transparency in credit risk benchmarks since the inception of the CRI.

Going forward, RMI plans to actively work with users to take advantage of the unique research infrastructure at the institute to propagate real world applications in credit risk benchmarks and research. Some interesting areas include applications in counterparty risk management and stress testing of financial systems by policymakers. RMI also remains committed to making its vast resources available for academic research.

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Published quarterly by Risk Management Institute, NUS
Editor: Ivy Wang (rmiwy@nus.edu.sg)