Managing Europe’s Deflation Risk Calls for a Cross-Country Credit Risk Score

During a session at Davos, the president of the European Central Bank indicated a willingness to buy loans of households and companies as part of managing deflationary risk in Europe. He will need a market to be created should the ECB be required to operate a monetary programme to thwart deflation in Europe.

One of the key prerequisites for this market is a transparent and internationally recognised benchmark that can measure credit risks at a loan level, and so enable a wide circle of investors to confidently invest.