Update: Fitch calls for notching debate

When Fitch released its initial notching study in late April, rumours mounted that the rating agency was considering showing its findings to the US Department of Justice and the US Securities and Exchange Commission. There was also speculation that Fitch would launch a lawsuit against Moody’s.

A New York-based Fitch spokesman today told RiskNews that “the best course of action for the time being is an open public forum in which all sides can discuss the issues".

“When, and if, meaningful discussions can not be reached we will explore other avenues,” the spokesman added.

In mid-April the Bond Market Association (BMA) cancelled a roundtable panel discussion on the practice of notching. “The current heated environment would not allow for meaningful discussions of the issues,” a BMA spokesman said at the time.

The BMA today said it had no immediate intention of rescheduling a roundtable discussion.

Moody's was not immediately available for comment. Last month, Brian Clarkson, head of structured finance at Moody's in New York, told Risk magazine that he is keen to speak about the notching controversy with the BMA "or anyone who wants to sit down at a table with us".

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