IHS Markit has teamed up with Credit Benchmark to create the “industry’s first” securities lending data platform that includes tools for managing counterparty credit risk.
Through the collaboration, IHS Markit will incorporate Credit Benchmark’s credit risk analytics, Consensus Analytics, into its platform.
In doing so, IHS Markit says it can offer additional performance measurement and reporting capabilities for global lending programmes.
The IHS Markit Securities Finance performance tracks more than $25 trillion of global securities in lending programmes from more than 20,000 institutional funds.
Its measurement tool enables firms to compare returns on portfolio assets against a variety of customisable peer groups.
In a statement on the deal, IHS Markit explains that by enriching its platform with Credit Benchmark's consensus analytics it can independently evaluate risk-return exposure based on the credit quality and liquidity of counterparty assets.
Credit Benchmark is the brainchild of Donal Smith and Mark Faulkner, the man behind Data Explorers, which was acquired by Markit (now IHS Markit) in 2012.
It is the first financial data company to provide consensus credit risk assessments on a global range of corporations, financial institutions, sovereigns and other funds.
Its credit risk inputs are sourced from more than 40 of the world’s leading financial institutions, providing a new unique measure of risk.
“Consensus credit analytics brings new and much-needed transparency to the entire securities lending landscape across beneficial owners, agents and principal borrowers,” says Faulkner. “I am delighted to be returning to the securities finance space with this particular service targeted at helping industry participants [with] know your counterparts creditworthiness.”
Paul Wilson, managing director and global head of securities finance at IHS Markit, adds: "Our collaboration with Credit Benchmark creates the industry’s first solution for managing counterparty credit risk in step with securities lending inventory and loan activity.”
For IHS Markit, the partnership comes shortly after it opened its high-quality liquid asset reference data and inventory and portfolio stability metrics to its securities finance clients.
The latest addition of credit risk analytics will further allow clients to optimise their use of capital, the firm says.
