HICS: developed for internal use

Our approach as an independent plan manager, able to select and deal with issuers / counterparties without bias, is that we seek to identify and deal with strong issuers / counterparties.

The Financial Stability Board (‘FSB’) identifies a list of 30 Global Systemically Important Banks (‘G-SIBs’) each year (usually in November). As the name suggests, G-SIBs are fundamentally the more important (usually bigger and stronger) banks, in a country / region / globally. As a result, G-SIBs are subject to more stringent regulatory requirements, including higher Tier 1 capital ratios.

It’s hard to argue with the rationale of recognising G-SIBs as bigger / stronger banking groups: we therefore deal predominantly with banking groups which are regulatorily identified as G-SIBs or, as a minimum, Domestic Systemically Important Banks (‘D-SIBs’).

• We developed HICS for internal purposes (at Tempo) to help analyse, assess, understand and compare issuers / counterparties.
• HICS covers all 30 G-SIBs, plus a small number of D-SIBs and other issuers of or counterparties to UK retail structured products.
• HICS compiles multiple Factors across various Categories, pertinent to assessing and considering issuer / counterparty financial strength / credit risk, using a robust methodology, including a scoring system.
• The widely recognised measures and indicators of financial strength / credit risk and scoring system support and can provoke detailed and objective analysis, assessment, understanding and comparison of issuers / counterparties