Scope takes over rating business from Euler Hermes
The European credit watchdog wants to become a counterpoint to the power of the American rating giants. A takeover should now help. However, when it comes to the Grensill Bank rating, Scope looks unfortunate.
maf. Frankfurt. At the end of the year, the time has come: The Berlin-based rating agency Scope hopes to be included in the illustrious group of credit checkers recognized by the European Central Bank (ECB). That would be the equivalent of an accolade for the European agency, because then it would be able to operate at eye level in Europe with the established providers Standard & Poor’s (S&P), Moody’s and Fitch. In order to be able to demonstrate the broadest possible field of expertise by then, Scope is now taking over the rating agency of the credit insurer Euler Hermes, which belongs to the group of the Munich insurer Allianz. Scope wants to inform the public about this on Wednesday.
“The takeover is a further step in the direction of our strategic goal of establishing a European rating agency,” says managing director and founder Florian Schoeller in an interview with FAZ. With Euler Hermes Rating GmbH, Scope is expanding its rating focus to include the promising fields of medium-sized companies and project financing . These two areas would become considerably more important in a European capital markets union.
Prominent investors and fellow campaigners
Scope is owned 40 percent each by Schoeller and the major BMW shareholder Stefan Quandt. A further 20 percent are held by the Scope Foundation, which was established last year and which can count on prominent members such as the former Federal President Horst Köhler or the former ECB President Jean-Claude Trichet. The purpose of the foundation is to ensure that no one other than the anchor shareholders can exert any influence on Scope. The rating agency deliberately wants to remain European.
“There is a strong economic interest in a European rating agency, among other things because the big three American agencies have apparently again implemented significant price increases in the past few years as part of their oligopoly position,” says Schoeller. According to the Scope boss, many investors and capital market issuers therefore want more competition and rating alternatives in Europe. “Politically, there is also a tailwind, because after the experiences of the Trump years, the sovereignty of Europe is also demanded with regard to its own analytical positions,” added Schoeller.
In the corporate bond sector, a good 95 percent would be rated by American analysis glasses due to the supremacy of the three big rating agencies. Scope stands for a European perspective on credit risks. “We take regional differences into account, which leads, for example, to different assessments of liquidity or pension obligations of European companies.”
But first the ECB has to give its blessing. Apparently no problem for Schoeller: “Since 2018, Scope has met the requirements to be one of the rating agencies on whose ratings the ECB relies.” The period in which Scope has to prove a three-year rating minimum coverage runs at the end of the year out. “Scope’s strategic focus is growth. That’s why we’re investing, ”says the Scope boss. He emphasizes that one does not need to be recognized by the ECB on the way to profitability. An important business area that Scope has built up itself and of which Schoeller is very proud is the assessment capacities in the area of sustainable financial investments, which will be of outstanding importance in the competition of the rating agencies in the future.
Scope last came into focus with the Greensill Bank in Bremen. Scope rated the bank as worth investing in the autumn, which in retrospect turned out to be unfortunate, even if the rating agency pointed out that the risks had been pointed out in good time. This is also unfortunate because Greensill Bank’s chairman, Maurice Thompson, is on Scope’s advisory board. The former Germany boss of Citigroup was also chairman of the British-Australian parent company Greensill Capital. Big rating agencies also make incorrect assessments, as the very favorable rating of Wirecard by Moody’s has shown.
Strictly regulated processes
Schoeller does not want to go into this, but refers to the function of the advisory board, which is supposed to dovetail Scope more closely with the European financial sector. The organization of the advisory board complies with regulatory requirements. Its members are not statutory organs and in principle do not deal with ratings. “And therefore they cannot influence the strictly regulated rating processes.”
Last June, Scope suffered a setback when the EU Securities and Exchange Commission imposed a fine of EUR 640,000 on Esma for deficiencies in the valuation processes