Category: Criteria
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Changing Lifestyles Force New Rating Criteria
The pandemic is leaving its mark on rating systems from different perspectives. Working families swap the city for country living: Changing work habits brought about by the Covid-19 pandemic and rising house prices have seen households turn their back on cities for nearby countryside locations. There are changes in real estate markets, but also in […]
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A Geo-Economic Turning Point
“Looking at the big picture, the capital markets are facing a real turning point – towards looming resource scarcity and increased inflationary pressure. The current corrections are therefore not a brief blip, but the beginning of a tectonic market shakeout,” said Dr. Heinz-Werner Rapp, board member and chief investment officer of FERI, at the digital […]
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Assumptions of Implicit Government Support
Why is it not wise to ignore an important dimension of the bank rating, not even for capital adequacy purposes? According to the Basel Framework as it will appear in the future on January 1, 2025, banks incorporated in jurisdictions that allow the use of external ratings for regulatory purposes will assign to their rated […]
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ESG-Rating: Animals Count more than Humans
Mistreating workers is not as important as mistreating animals. Consumers play an active role in the application of ESG criteria, i.e. Environmental, Social, and corporate Governance data that refers to metrics related to intangible assets within the enterprise. A survey throws a dubious light on the values of American and German consumers. According to a […]
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The Role of Ratings in Greenwashing
Austria’s Financial Market Authority (FMA) warns consumers against “greenwashing” in the new edition of their consumer information series “Let’s talk about money”. “Greenwashing” means that a financial product is advertised as environmentally friendly, green or sustainable – i.e. colored green – even though it does not actually meet these standards. In this way, potential investors […]
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Monarchs or the Pope Are Not Role Models for China
Many western states do not give China a good role model for further developing the political system. All leading rating agencies – FitchRatings, S&P, DBRS Morningstar – give the People’s Republic of China a credit rating of A+ or A1. Moody’s credit profile of China (issuer rating A1) is supported by the country’s “a1” economic […]
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Rating Forest Investments
Understanding the importance of sustainability has popularized an asset class that used to be reserved for the state, churches and nobles. Forest – to be precise its wood – has always served people as fuel, product and building material. Forest has now become the epitome of sustainable investments. The idea of sustainability emerged in a […]
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The Boom of the Chinese Economy, A Key Factor That Upsets Country Risk
The rise of China was certainly the biggest “game changer” of the globalization years. This blog article is a short excerpt from Country Risk – The Bane of Foreign Investors (Springer, 2020) by Norbert Gaillard. The reforms launched by Deng Xiaoping, embodied in the 1979 promulgation of the Joint Venture Law and in the establishment […]
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Is The Notion of Efficiency Alien to Charity?
there are minimum requirements for recognized non-profit organizations. But can their efficiency and effectiveness also be rated? At effektiv-spenden.org Sebastian Schwiecker, founder and managing director of UES – Gemeinnützige Unternehmergesellschaft (haftungsbeschränkt) für effektives Spenden, tries to give very specific answers to the question of how you can achieve the greatest possible effect with your donation, […]
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The Virus Reverses Gender Equality, Not Only An Issue for Impact Investors
The COVID-19 pandemic has profoundly affected the lives of countless people around the world, with women being the hardest hit. Not only because they have a higher risk of COVID-19 infection due to their work in the health sector, but also because they are over-represented in professions where keeping your distance is more difficult and […]
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Vectron’s Recurring Income Strengthens Its Rating
Vectron Systems AG (Vectron), a leading provider of intelligent, digitized cash register systems consisting of hardware, software and cloud services, with a focus on the gastronomy and bakery sectors, has created itself a better position for its credit ratings. A stable rating history is ensured in particular by sustainable, recurring income. Vectron makes use of […]
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Why Art Rating Criteria Need to Be Repaired
The Artprice Report, covering 20 years of Contemporary Art auction history, is a basis for understanding why evidence-based “art rating” is more important and urgent today than ever before. The complexity and global nature of the art market has never been greater. In the last two decades, decisive impetus came from China. “In 20 years,” […]
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How A Credit Rating Agency Should Determine the Weights of ESG Criteria
Moody’s “General Principles for Assessing Environmental, Social and Governance Risks” relate to issues which may have greater downside risk than upside potential for rated issuers. The introduction of these principles is perceived by many issuers as an additional pressure that weighs on them in order to prove their sustainable management. This pressure is unsettling, especially […]
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DEFAMA’s Gemstones Among German Commercial Real Estate
The Berlin-based Deutsche Fachmarkt AG (DEFAMA) invests specifically in small retail properties in small and medium-sized cities, predominantly in northern and eastern Germany. The most important purchase criteria are two or more chain stores with good credit ratings as anchor tenants, if possible no more than 10 tenants and an annual net rent of at […]
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Moody’s Heatmap Shows Heightened Environmental Credit Risk
Moody’s analysts have revised their environmental classification to reflect evolving environmental, social and governance standards, disclosure frameworks and market conventions among issuers and investors. Environmental risks can arise from regulatory and policy issues, hazards or a combination of both. The five environmental categories Moody’s considers most material to credit are carbon transition, physical climate risks, […]
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Cost Rating for Private Owners When Renting
Real estate remains the most popular form of investment among Germans. In times of volatile stock markets, a real estate investment is still seen by many private investors as a secure return opportunity. However, not all private owners use their apartments themselves, but rent them out. In doing so, however, they often underestimate the costs […]
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Trust In a Time of Uncertainty
The corona pandemic is far from over. This is especially true if you do not look at it from a purely medical point of view, but also from the perspective of the social and economic consequences. The virus divides the opinions of experts: on the one hand those who warn of the dangers of the […]
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Data for Bank Management Board Member’s Reputation Rating
The German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin) provides some insights into what kind of data is used to establish a bank management board member’s reputation rating in its Guidance Notice on management board members. This is pursuant to the German Banking Act (Kreditwesengesetz – KWG), the German Payment Services Supervision Act […]
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Credit Rating Criteria for Leasing Companies
Under the umbrella of the Auditing Association of German Banks, GBB-Rating Gesellschaft für Bonitätsbeurteil mbH (hereinafter referred to as “GBB-Rating”) provides long-term credit ratings of leasing companies. GBB-Rating has published criteria for the rating of leasing companies in German on its website. Unfortunately there was (August 23, 2020) no English translation. In the following are summarized some of their […]
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Rating Airports
Credit ratings play an important role for airports and their operators, since in most cases the capital requirements for airports can only be met when bonds are issued. Ratings are used to assess airport liabilities both when issuing bonds and when trading bonds. The rating system applies both to independent airports and to companies with […]
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Equity Rating Repair
Stock instruments issued or to be issued and / or traded on certain stock markets may be the subject of ratings. Stock ratings reflect the risks associated with the creditworthiness of the issuer and the stock market liquidity of an instrument. However, they do not address the risk of loss associated with price changes and […]
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Recovery Rating
Credit risk is a function of an issuer’s probability of default and the loss given default on a specific debt instrument. For noninvestment grade corporate issuers, some rating agencies assign separate ratings for these two components of credit risk. An issuer rating is a rating agency’s assessment of the probability that an issuer will default […]
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Determining Recovery Ratings
Credit risk is a function of an issuer’s probability of default and the loss given default on a specific debt instrument. For noninvestment grade corporate issuers, some rating agencies assign separate ratings for these two components of credit risk. An issuer rating is a rating agency’s assessment of the probability that an issuer will default […]
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Scoring Sustainable Residential Locations
What constitutes future-oriented residential areas? The answer is complex and can not be answered in a general or even complete manner for all residential real estate between Norderney and Berchtesgaden. A recent study searched for similarities that characterize future-proof and long-term profitable housing, and examines these success criteria more closely. Ten macro-location and nine micro-location […]
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Rating Referral Marketing Businesses
“There is no recognizable path ahead of us, but only behind us,” writes Gabi Steiner in her book “From Person to Person – Earning a Stable Income From Referral Marketing“. Any rating of the future prospects of a business model can only be based on the information that humanity has gathered to date. “Successful people,” […]
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Rating Referral Marketing Businesses
“There is no recognizable path ahead of us, but only behind us,” writes Gabi Steiner in her book “From Person to Person – Earning a Stable Income From Referral Marketing“. Any rating of the future prospects of a business model can only be based on the information that humanity has gathered to date. “Successful people,” […]
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