rec_33

(33) In order to ensure that managers of MMFs do not use different assessment criteria for evaluating the credit quality of a money market instrument, securitisation or ABCP and thus attribute different risk characteristics to the same instrument, it is essential that managers of MMFs rely on the same criteria. To that end, the minimum criteria for the assessment of a money market instrument, securitisation and ABCP should be harmonised. Examples of internal credit quality assessment criteria are quantitative measures on the issuer of the instrument, such as financial ratios, balance sheet dynamics and profitability guidelines, each of which is evaluated and compared to those of industry peers and groups, and qualitative measures on the issuer of the instrument, such as management effectiveness and corporate strategy, each of which is analysed with a view to determining that the issuer's overall strategy does not impede on its future credit quality. A favourable outcome of the internal credit quality assessment should reflect sufficient creditworthiness of the issuer of the instruments and sufficient credit quality of the instruments.

← rec_32 · All articles · rec_34 →

Source: EUR-Lex (Cellar) · retrieved 2026-10-30 · Text as adopted (Official Journal); later amendments are not incorporated in this text.