Though Cowards Flinch

With my interest in all things credit rating re-piqued, I thought it was high time I did a quick comparison between Moody’s Code of Conduct and what Moody’s Head of Sovereign Risk, Pierre Cailleteau had to say in the report issued yesterday (‘Aaa Sovereign Monitor: major challenges still face the eight Aaa-rated sovereigns‘). 

You know, the way you do.

First though, there was the little matter of getting hold of a full copy of the report.  I registered with the Moody’s Investors Service (MIS) website, only to be told that access to the full report on the Aaa-rated sovereigns was denied, and that I’d have to contact a representative about a subscription. 

I’m waiting to see how much that would costs, but in the meantime, here’s what the Code of Conduct says about such matters at para 3.2:

‘MIS will make Credit Rating actions on public debt securities or public debt Issuers available to the public without cost. Such Credit Rating actions will be posted on MIS’s public website and through simultaneous transmission to the news media, as well as via electronic or print subscription services. The public will be able to obtain a current public Credit Rating for any Issuer, debt or debt-like obligation without cost. Rating actions and a brief explanation of the rationale for the rating action will remain on MIS’s public website for a minimum of seven consecutive days.’

Am I missing something? Isn’t charging the public for a report on MIS’s rating of the 8 Aaa countries in  direct contravention of the MIS code of conduct?

Not a good start to my scrutiny.

Here’s my email to customer services at Moody’s Investors Services;

Dear ….

I note paragraph 3.2 of you code of conduct. It indicates that ‘MIS will make Credit Rating actions on public debt securities or public debt Issuers available to the public without cost’.

When I sought to access the report on MIS’s credit ratings of Aaa countries (08 December), I found it be available on a subscription basis only. Prima facie, this appears to be in contravention of your own code of Conduct.

I would be grateful if you would refer this matter on for appropriate investigation and revert to me at your earliest convenience.

In my next post, I’ll look at whether Pierre Cailleteau’s statements, garnered as best I can from the free media (esp. Bloomberg and Marketwatch), are in keeping with the same Code of Conduct. 

(Hint: they’re not in keeping and all, and what Cailleteau says reveals not just deep flaws in the current ratings system, but the way that system is being used to bypass democratic norms in favour of entrenched neoliberal economic policies.)