Unified ratings: a victory for common sense
With Moody’s announcement of a new system of scores for structured finance deals last week, one dangerous idea has been killed. This was that rating agencies should give securitisations a special set of ratings, distinct from the ordinary triple-A to C scale. That would have defeated the purpose of ratings and it is a triumph for common sense that regulators’ bullying calls to segregate ABS have not prevailed. However, the rating agencies still have a very long way to go to win back the market’s trust.
Last week, the structured finance market scored a victory over political pressure as Moodys revealed that it had decided not to create a separate rating scale for structured finance products, as it suggested in a consultation paper in February.
In so doing, Moodys is taking the same route as
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