Moody's bank rating upgrades infuriate market

Moody's has come under fire for upgrading up to 200 banks in a sweeping change to the way it rates financials.

Bank analysts roundly criticised the move, which conferred triple-A status on all three Icelandic banks, Kaupthing, Landsbanki and Glitnir, which were formerly rated A1, A2 and A1 respectively. By contrast, ABN Amro, which issues senior unsecured bonds with five times less yield than the Icelandic banks, enjoys Aa1 status following the change.

The new methodology implemented at the end of

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Credit risk & modelling – Special report 2021

This Risk special report provides an insight on the challenges facing banks in measuring and mitigating credit risk in the current environment, and the strategies they are deploying to adapt to a more stringent regulatory approach.

The wild world of credit models

The Covid-19 pandemic has induced a kind of schizophrenia in loan-loss models. When the pandemic hit, banks overprovisioned for credit losses on the assumption that the economy would head south. But when government stimulus packages put wads of cash in…

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