Recently, Fitch, Moody's Investors Service, and Standard Poor's announced several changes or clarifications to their ratings policies in regards to the sovereign ceiling and bank ratings. In June 2001, both Moody's and Fitch, and on July 23, Standard Poor's, clarified their policies towards the sovereign ceiling.i While some of these changes apply to ratings generally, our concern in this comment is particularly with the impact they have on bank ratings.
But before exploring the significance of these changes, or clarifications as the case may be, it is helpful to take a broader look at the meaning of ratings and the rationale for the earlier policies. Ratings, of course, are evaluations...
