The Credit Assessment of Large Firms

The paper provides a comparative review of the methodologies used to assess the creditworthiness of large non-financial corporations. We examine four major credit assessment systems: selected international External Credit Assessment Institutions (ECAIs), banks’ Internal Ratings-Based (IRB) systems, the In-house Credit Assessment Systems (ICASes) of euro-area central banks, and credit rating agencies operating in the Italian market. Although these frameworks differ in terms of regulatory framework and objectives, several common methodological features emerge. These include the integration of soft information with hard data, group-level assessment, sector analysis and monitoring procedures. We also find some differences, particularly in the integration of environmental, social and governance (ESG) factors and in the use of artificial intelligence (AI) tools