Moody’s: Second Covid Wave Increased Banks’ Asset Risks
According to Moody’s Investors Service, second wave of Covid infections has increased the asset risks for Indian banks.
- According to it, second wave of coronavirus infections in India has exacerbated stress on individuals and small businesses. They were hit the hardest by the initial covid-19 outbreak.
- Thus, there are a number of factors to prevent sharp increases in problem loans. But banks have sufficient buffers to absorb anticipated loan losses.
Moody’s Investors Service or Moody’s
Moody’s is the bond credit rating business of Moody’s Corporation. It represents traditional line of business and historical name of the company. The company provides international financial research on the bonds issued by commercial as well as government entities. Moody’s is among Big Three Credit Rating Agencies along with Standard & Poor’s and Fitch Group. It also finds place in the Fortune 500 list of 2021.
Function of the company
It ranks the creditworthiness of borrowers by using standardized ratings scale. This scale measures expected investor loss in case of default. In the rating system of the company securities are assigned a rating ranging from Aaa to C. Aaa is the highest quality while C the lowest.
Moody’s was founded in 1909 by John Moody in order to produce manuals of statistics for stocks and bonds & bond ratings. Company was identified as the Nationally Recognized Statistical Rating Organization (NRSRO) in 1975.
NRSRO is a credit rating agency, which is approved by the U.S. Securities and Exchange Commission in a bid to provide information that financial firms are required to rely on for certain regulatory purposes.
Category: Economy & Banking Current Affairs
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