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.
Share this..
Related stories
Royal Bank of Scotland faces immediate refinancing issues
Despite the fact that Royal Bank of Scotland has been bailed out by UK taxpayers it has been revealed that around £400 billion of short-term debt will need to be refinanced within the next 12 months. However, it is the £300 billion of short-term debt which is due for refinancing over the next four weeks which is causing some concern amongst stock market analysts.
In traditional mo...
Barclays bank confirms record profits
Today's record profits of £11.6 billion announced by Barclays bank have attracted significant criticism from politicians across the board. The very fact that £2.7 billion has been put aside to cover staff bonuses, with the majority going towards the investment arm, is also causing concern. This comes at a time when the UK banking arena as a whole is still struggling to readjust to life after the...
Read MoreStuart Rose agrees to 25% pay cut
Stuart Rose, the executive chairman of Marks & Spencer, has agreed to take a 25% pay cut as part of his executive duties will be taken on by new chief executive Marc Borland. There has been speculation as to whether Sir Stuart Rose would have been keen to reduce his pay packet as his role was reduced with an initial indication he was unhappy about being forced down this particular route. However,...
Read MoreHas the FSA signed off Prudential's large acquisition?
There is growing speculation within investment markets that the Financial Services Authority (FSA) has finally provisionally approved Prudential's £24 billion acquisition of AIG's Asian operation. This is an acquisition which has been mired in confusion and delays after the company was initially forced to abandon an announcement regarding fundraising last week. So are we now at the endgame? It...
Read MoreBP shares hit 14 year low
Shares in BP fell to a 14 year low yesterday amid concerns the company may well have to go cap in hand to shareholders for additional funding. There is also speculation that if BP was forced into the money markets to raise funds then the company would likely pay a premium over and above the average interest rates at the moment. So when will this nightmare end? When you consider the damage to no...
Read More