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Moody’s has not recovered nor learned any lessons apparently

This is a dramatic situation for Moody’s and the state of the rating agencies.

NY Officials Cast Doubts on Moody’s | FT

US insurance regulators are expected to discuss dropping Moody’s Investors Service from a list of acceptable rating organisations at a meeting later this week, according to an official in the New York Insurance Department, reports Reuters.

This from the Reuters piece. They have not recovered from the credibility gap associated with the financial crisis. The insurance industry has $3 trillion in rated bonds in the insurance industry alone.

The three leading ratings firms — Moody’s, Fitch and Standard & Poor’s — have been criticized for fueling the financial crisis by assigning and maintaining high ratings on mortgage-backed securities, even as concerns about the health of the U.S. home market grew.

Written by Colin Henderson

September 21, 2009 at 00:57

Posted in Uncategorized

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2 Responses

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  1. If Moody’s aren’t prepared to attend an NAIC regulatory hearing to answer questions about its ratings process, they desevre to be dropped from the list of acceptable rating organisations. All other firms have agreed to answer questions which are designed to improve the ratings process, so why should Moody’s be let off for their lack of co-operation?

    Finance Ed

    September 21, 2009 at 03:34

  2. @Finance Ed – absolutely. They must be really screwed up internally to have missed that.

    Colin Henderson

    September 21, 2009 at 11:57

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