Bangkok--14 Dec--Standard & Poor's Despite growing concerns about credit risk, Standard & Poor's Ratings Services' latest globally banking survey finds that corporate concentrations at banks are generally still at levels of two years ago. They remain a modest risk for banks in the developed world and a high risk among emerging market banks. "The modest risk for banks in developed countries generally reflects moderate or contained single-name concentrations and good quality on average, though with important exceptions," said Standard & Poor's credit analyst Renato Panichi, one of the co-authors of the report, "Corporate Concentration Risk At Banks Is Modest In Mature Markets, High In Emerging Markets." "In contrast, emerging-market banks feature high single-name concentration, which is a major risk and constraining rating factor for many, with the notable exception of those in Latin America," added Mr. Panichi. For this global study, our second since 2005, we analyzed the top 20 single-name concentrations at 176 of the banks we rate, representing many of the largest in Western Europe, North America, Japan, Australia, EEMEA (Eastern Europe, the Middle East, and Africa), Latin America, and South Korea. "Amid the current credit crisis, companies appear to be returning to banks for funding. This trend toward reintermediation, if confirmed, may add a certain degree of concentration," said Standard & Poor's credit analyst Bernard de Longevialle. The current crisis highlights some deficiencies in current accounting and regulatory regimes in developed and emerging markets governing single-name concentrations. Bank regulations haven't to date prevented banks from taking off-balance-sheet single-name concentration risks that are sometimes excessive. Standard & Poor's believes investors would benefit from increased public disclosure about the size of banks' large exposures, though no country currently requires this. We understand that many regulators are working on tighter rules for corporate concentrations of all kinds, and we will monitor how much they can close the current gap. However, regulatory action is only part of the solution. Banks in particular need to establish more sophisticated enterprise risk management. For our part, in the belief that concentration risk is an important element in the risk profile of a bank, we will start quantifying impacts of single-name, geographic, and sector concentration in the risk-adjusted capital framework that we will introduce in 2008. The report also finds that use of credit derivatives to manage single-name concentration is still limited mainly to large banks in developed countries. The report is available to subscribers of RatingsDirect, the real-time Web-based source for Standard & Poor's credit ratings, research, and risk analysis, at www.ratingsdirect.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-9823 or sending an e-mail to [email protected]. Ratings information can also be found on Standard & Poor's public Web site at www.standardandpoors.com; under Credit Ratings in the left navigation bar, select Find a Rating, then Credit Ratings Search. Members of the media may request a copy of this report by contacting the media representative provided.