Moody's Doesn't Weigh Impact of Downgrades, Guardian Says
Moody’s Investors Service’s ratings are based on financial changes and don’t specifically consider whether a downgrade will make a country’s situation worse by prompting investors to sell bonds, the U.K.’s Guardian reported, citing Moody’s European head Frederic Drevon.
Regulators are partly to blame for herd selling after a downgrade, because ratings have been written into rules governing what bonds can be held by certain investors, the newspaper said, citing Drevon. Drevon said he doesn’t think Moody’s ratings have lost credibility with investors, the Guardian reported.
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