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What kind of organization is Moody's? Who watches them? Who made them qualified to issue ratings? Are they accountable for their ratings? Why would anyone liste

by sasoon 14y ago

What kind of organization is Moody's? Who watches them? Who made them qualified to issue ratings? Are they accountable for their ratings? Why would anyone listen what they say?

ghshephard 14y ago
http://en.wikipedia.org/wiki/Nationally_Recognized_Statistical_Rating_Organization http://en.wikipedia.org/wiki/Nationally_Recognized_Statistic... What kind of organization is Moody's? - They are an NRSRO. Who watches them? Who made them qualified to issue ratings? "The U.S. Congress passed the Credit Rating Agency Reform Act of 2006, Pub.L. 109-291, 120 Stat. 1327, enacted September 29, 2006. This law required the SEC to establish clear guidelines for determining which credit rating agencies qualify as NRSROs. Are they accountable for their ratings? "In February 2009, the SEC promulgated amended regulations designed to address concerns about the integrity of the process by which NRSROs rate structured finance products," Why would anyone listen what they say? "A Nationally Recognized Statistical Rating Organization (NRSRO) is a credit rating agency (CRA) that issues credit ratings that the U.S. Securities and Exchange Commission (SEC) permits other financial firms to use for certain regulatory purposes....SEC regulations also require that money market funds (mutual funds that mimic the safety and liquidity of a bank savings deposit, but without Federal Deposit Insurance Corporation insurance) comprise only securities with a very high rating from an NRSRO. Likewise, insurance regulators use credit ratings from NRSROs to ascertain the strength of the reserves held by insurance companies."
- johnchristopher 14y ago
  So if I read correctly it's a US organisation, controlled by the SEC, giving european countries, UE and other structured financed products (is that novlangue for "country" ?) a note to estimate the financial credit reserve of said products. Are there such european credit rating agencies giving notes to California or Kentucky ? We never hear about those on this side of the ocean :(
  - digitalengineer 14y ago
    There are plans to set up European Agency's. Mainly to add balance to the US colored ratings. For now you could also check the Chinese Rating Agency: "The Dagong Global Credit Rating Company, which lowered the United States to A+ last November after the U.S. Federal Reserve decided to continue loosening its monetary policy, announced a further downgrade to A, indicating heightened doubts over Washington's long-term ability to repay its debts." http://edition.cnn.com/2011/BUSINESS/08/02/china.us.rating/index.html http://edition.cnn.com/2011/BUSINESS/08/02/china.us.rating/i... Funny, communists lowering a credit rating because it's too socialist (Keynes and loose money policy).
d__space 14y ago
http://en.wikipedia.org/wiki/Moody%27s_Investors_Service#Role_in_capital_markets http://en.wikipedia.org/wiki/Moody%27s_Investors_Service#Rol...

by sasoon 14y ago

What kind of organization is Moody's? Who watches them? Who made them qualified to issue ratings? Are they accountable for their ratings? Why would anyone listen what they say?

ghshephard 14y ago

http://en.wikipedia.org/wiki/Nationally_Recognized_Statistical_Rating_Organization http://en.wikipedia.org/wiki/Nationally_Recognized_Statistic... What kind of organization is Moody's? - They are an NRSRO. Who watches them? Who made them qualified to issue ratings? "The U.S. Congress passed the Credit Rating Agency Reform Act of 2006, Pub.L. 109-291, 120 Stat. 1327, enacted September 29, 2006. This law required the SEC to establish clear guidelines for determining which credit rating agencies qualify as NRSROs. Are they accountable for their ratings? "In February 2009, the SEC promulgated amended regulations designed to address concerns about the integrity of the process by which NRSROs rate structured finance products," Why would anyone listen what they say? "A Nationally Recognized Statistical Rating Organization (NRSRO) is a credit rating agency (CRA) that issues credit ratings that the U.S. Securities and Exchange Commission (SEC) permits other financial firms to use for certain regulatory purposes....SEC regulations also require that money market funds (mutual funds that mimic the safety and liquidity of a bank savings deposit, but without Federal Deposit Insurance Corporation insurance) comprise only securities with a very high rating from an NRSRO. Likewise, insurance regulators use credit ratings from NRSROs to ascertain the strength of the reserves held by insurance companies."

johnchristopher 14y ago
So if I read correctly it's a US organisation, controlled by the SEC, giving european countries, UE and other structured financed products (is that novlangue for "country" ?) a note to estimate the financial credit reserve of said products. Are there such european credit rating agencies giving notes to California or Kentucky ? We never hear about those on this side of the ocean :(
- digitalengineer 14y ago
  There are plans to set up European Agency's. Mainly to add balance to the US colored ratings. For now you could also check the Chinese Rating Agency: "The Dagong Global Credit Rating Company, which lowered the United States to A+ last November after the U.S. Federal Reserve decided to continue loosening its monetary policy, announced a further downgrade to A, indicating heightened doubts over Washington's long-term ability to repay its debts." http://edition.cnn.com/2011/BUSINESS/08/02/china.us.rating/index.html http://edition.cnn.com/2011/BUSINESS/08/02/china.us.rating/i... Funny, communists lowering a credit rating because it's too socialist (Keynes and loose money policy).

d__space 14y ago

http://en.wikipedia.org/wiki/Moody%27s_Investors_Service#Role_in_capital_markets http://en.wikipedia.org/wiki/Moody%27s_Investors_Service#Rol...