Moody’s proposes new rating approach

Moody’s has invited market participants to comment on a proposed adjustment to its cover bond rating methodology that, if put into practice, will lead to rating uplifts. The consultation reflects the European Union’s newly proposed Bank Recovery and Resolution Directive and comes just in time to prevent the covered bond programmes of two Italian banks from being downgraded to sub-investment grade — although Moody’s was at pains to point out the timing was a co-incidence.