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Why did the credit rating agencies not spot any problems at Quinn Group?

In light of financial difficulties at Quinn Group, owner of the Quinn Insurance operation, there is concern about the position of credit rating agencies regarding the debt of Quinn Group. In August 2007, when the credit crunch began to take hold, the Moody's credit rating agency came out with a "positive outlook" on Quinn Group despite the fact that the company had begun to invest significant amounts of money into Anglo-Irish Bank which later hit serious financial trouble.

In 2008 Quinn Group cancelled its contract with Moody's credit rating agency suggesting that even though the company was on "positive outlook" there seemed little chance of an upgrade in the short-term. While the position of credit rating agencies around the world is imperative to financial markets, there is growing concern that some of the major financial collapses seen in the past were not flagged by these companies.

The truth of the matter is that credit rating agencies can only arrive at decisions regarding ratings on the information available to them, so if vital information is not available at the time that a rating is changed there is the chance it could potentially not reflect the underlying situation.

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