Moody’s to revise rating methods

Moody’s could introduce new rating methods by the end of the year according to CEO Ray McDaniel. The rating agency is understood to be looking in particular at how illiquid securities perform in stressed markets. Mr McDaniel said new a rating framework would be in place in “a matter of months, possibly by the end of the year.” Changes could fundamentally shake up the pricing and risk weighting of securities. Rating agencies have come under particular fire this summer after even the most highly rated AAA portfolios suffered dramatically in the wake of the subprime mortgage crisis.

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