Posts tagged 'Fitch Ratings'

Sovereign rating bias, a clanging gauntlet lands [Update]

We’ve featured one study that claimed to find bias in sovereign ratings, written in the measured tones of academia, which was enough to set off some tit-for-tatting between S&P and the authors.

Well the members of UniCredit’s economics team have decided to enter the debate, and they have no intention of holding back on “the damaging bias in sovereign ratings”. The low down to follow, but lets skip to the conclusion:

In light of our findings, we suggest that credit rating agencies should be stripped of their regulatory powers and these transferred to an international body. Failing that, the ratings agencies should be forced to substantially increase transparency, including publishing a separate breakdown of the objective and subjective components of ratings, the minutes of the rating committees, and the voting records.

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Home is where the heart is, sovereign rating edition

To the many sticks used to bash the credit rating agencies for their role in the (near) downfall of the financial system, we can now add a new one: home bias.

The complaint comes with academic credentials from two economists at the University of Heidelberg, Andreas Fuchs and Kai Gehring, who have looked at the ratings produced by nine agencies in six countries for 143 sovereign issuers.

It turns out that economic and cultural ties produce a more favourable view of the homeland and, guess what, it has become more pronounced since the financial crisis. Read more

Breaking the full faith and credit, vs breaking the buck

Just for the record, FT Alphaville thinks of ‘technical’ default as one of those weasel words.

Still, some interesting comment from Fitch on Wednesday, on whether defaulted US Treasuries could still call the $2.694trn money market fund industry a home: Read more

We go live to Fitch’s Paris office…

Here’s the full text of Fitch Ratings’ one-notch French downgrade, which makes it the last of the big three agencies to remove AAA ratings from France. A key bit of the rationale:

Fitch now forecasts general government gross debt (GGGD) to peak higher at 96% of GDP in 2014 and decline only gradually over the long term, remaining at 92% in 2017. This compares with Fitch’s previous projections in December 2012 of GGGD peaking at 94% (and 92% when it first revised the Outlook to Negative in December 2011), and declining more rapidly to below 90% by 2017… Read more

Subprime securities – still being downgraded

If you woke up on June 10, 2013 and thought the subprime securities crisis was behind us, well, you were wrong.

Some two weeks ago Moody’s announced it was downgrading 28 tranches of various bonds (as well as upgrading two tranches, and confirming others) in an action that covered roughly $1.2bn worth of mortgage-backed securities (MBS). Read more

And what took *you* so long, Fitch?

Our headline is the same question you could have asked of Moody’s back in February

The UK lost its second AAA rating on Friday night after Fitch cut its rating to AA+. The outlook’s stable. S&P is now the only one of the big three giving Britain a top rating. The rationale from FitchRead more