New ECB rating agency Scope puts greater weight on euro zone protection mechanisms
By Marc Jones
LONDON (Reuters) — Scope, Europe's first ECB-approved credit ratings agency, promises to put more weight on the euro zone's improved ability to navigate crises although it has concerns about Italy and France and warns the Dutch election result could trouble its coveted triple-A grade.
By joining a soon-to-be-five-member group that the European Central Bank uses to judge government bond collateral values, Berlin-based Scope could play a significant role in any future financial market crisis.
It also fulfils an ambition held by policymakers for a domestic player since the height of the bloc's debt troubles 15 years ago, when mass downgrades by U.S. agencies like S&P and Moody's (NYSE:MCO) were openly blamed for stoking the turmoil.
Scope says its European roots give it a native appreciation of the way the euro area has tooled itself up, part of the reason it became the first agency to restore the investment-grade rating of financial-crisis poster child Greece.
«One of our distinguishing characteristics...is that we emphasise the multiple improvements in Europe's institutional set-up,» said Scope's top sovereign analyst Dennis Shen when asked how the agency assigns ratings compared to S&P, Moody's, Fitch and DBRS Morningstar — the other firms on the ECB's list.
«We take such institutional enhancements very seriously,» Shen told Reuters in the firm's first in-depth interview since winning the ECB's approval earlier this month, citing an example of how Covid-related support measures would outlast the pandemic.
While the euro zone has pledged to do «whatever it takes» and jointly issued debt for the first time during the pandemic, its debt load remains eye-watering.
Italy, France, Spain, Portugal and Greece
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